Comments on: Digging Vapor(m)illionaires http://gigaom.com/2006/08/04/digging-vapormillionaires/ Trusted Insights and Conversations on the Next Wave of Technology Wed, 25 Nov 2009 20:43:11 +0000 http://wordpress.com/ hourly 1 By: Is Digg.com Over-Valued? - For the Intelligent User http://gigaom.com/2006/08/04/digging-vapormillionaires/#comment-345204 Is Digg.com Over-Valued? - For the Intelligent User Sat, 14 Jul 2007 01:08:26 +0000 http://gigaom.wordpress.com/2006/08/04/digging-vapormillionaires/#comment-345204 <p>[...] assumptions are that Digg.com earns $3 Million a year in revenue, and that they have 20,000,000 visitors per [...]</p> [...] assumptions are that Digg.com earns $3 Million a year in revenue, and that they have 20,000,000 visitors per [...]

]]> By: Joseph http://gigaom.com/2006/08/04/digging-vapormillionaires/#comment-59293 Joseph Sat, 05 Aug 2006 17:30:41 +0000 http://gigaom.wordpress.com/2006/08/04/digging-vapormillionaires/#comment-59293 <p>Digg is more likely worth about a tenth of what BW says. </p> <p>The most recent valuation method I have seen is taking between 20 to 40% of annual revenues, to approximate cash flow margin, and then putting an 18 to 20 multiple on that (which is around what Google and other new internet companies trade for as a multiple on cash flow margin). If $3 mil a year in revenues is accurate, that would value Digg at around $11 million on the low side to around $24 million on the high side.</p> <p>If they were generating $3 million a month in revenues THAT would reasonably call for a $200 million valuation. Maybe someone at BW made a calculation error? Or maybe their expert source did?</p> Digg is more likely worth about a tenth of what BW says.

The most recent valuation method I have seen is taking between 20 to 40% of annual revenues, to approximate cash flow margin, and then putting an 18 to 20 multiple on that (which is around what Google and other new internet companies trade for as a multiple on cash flow margin). If $3 mil a year in revenues is accurate, that would value Digg at around $11 million on the low side to around $24 million on the high side.

If they were generating $3 million a month in revenues THAT would reasonably call for a $200 million valuation. Maybe someone at BW made a calculation error? Or maybe their expert source did?

]]> By: Agoracom http://gigaom.com/2006/08/04/digging-vapormillionaires/#comment-59292 Agoracom Fri, 04 Aug 2006 23:51:23 +0000 http://gigaom.wordpress.com/2006/08/04/digging-vapormillionaires/#comment-59292 <p>Om, this is the kind of hype you'd expect out of some '"pump and dump" e-mail stock spam that would go something like this:</p> <p>========= BW Stock Profile Of the Day - HOT HOT HOT</p> <p>HOT STOCK NOW - "$200 MILLION" ACCORDING TO PEOPLE IN THE KNOW!</p> <p>Digg.com (stock symbol DIGG) is going to take off this morning because people in the know are valuing it at $200 MILLION!</p> <p>Don't wait, this stock is going to take off and you are going to miss out on the next Google. Just look at these numbers!</p> <p>Revenues - $3,000,000! Profits - Now Breakeven and able to pay the rent! Current Value - $3,000,000 Projected Value Next Week - $200,000,000!!!!!! You Make - 66,000% !!!</p> <p>Buy it now. This is a freebie just for readers of BW stock promotions e-mail list.</p> <p>========</p> <p>BW deserves to be getting bashed. </p> <p>Best, George</p> Om, this is the kind of hype you’d expect out of some ‘”pump and dump” e-mail stock spam that would go something like this:

========= BW Stock Profile Of the Day – HOT HOT HOT

HOT STOCK NOW – “$200 MILLION” ACCORDING TO PEOPLE IN THE KNOW!

Digg.com (stock symbol DIGG) is going to take off this morning because people in the know are valuing it at $200 MILLION!

Don’t wait, this stock is going to take off and you are going to miss out on the next Google. Just look at these numbers!

Revenues – $3,000,000! Profits – Now Breakeven and able to pay the rent! Current Value – $3,000,000 Projected Value Next Week – $200,000,000!!!!!! You Make – 66,000% !!!

Buy it now. This is a freebie just for readers of BW stock promotions e-mail list.

========

BW deserves to be getting bashed.

Best, George

]]> By: Om Malik http://gigaom.com/2006/08/04/digging-vapormillionaires/#comment-59291 Om Malik Fri, 04 Aug 2006 23:36:35 +0000 http://gigaom.wordpress.com/2006/08/04/digging-vapormillionaires/#comment-59291 <p>oh that is easy - lets go grab a beer at harrington's. there is no secret handshake… just willingness to get a drink.</p> oh that is easy – lets go grab a beer at harrington’s. there is no secret handshake… just willingness to get a drink.

]]> By: Ted Rheingold http://gigaom.com/2006/08/04/digging-vapormillionaires/#comment-59290 Ted Rheingold Fri, 04 Aug 2006 23:14:27 +0000 http://gigaom.wordpress.com/2006/08/04/digging-vapormillionaires/#comment-59290 <p>Om, maybe hook us up with some sort of secret handshake or code word while the neighborhood is still (mostly ;) ours.</p> Om, maybe hook us up with some sort of secret handshake or code word while the neighborhood is still (mostly ;) ours.

]]> By: Robert Dewey http://gigaom.com/2006/08/04/digging-vapormillionaires/#comment-59289 Robert Dewey Fri, 04 Aug 2006 22:33:50 +0000 http://gigaom.wordpress.com/2006/08/04/digging-vapormillionaires/#comment-59289 <p>Only $3M/year? Sounds like they aren't capitalizing on their viewers all that well… I've found that monthly revenues closely follow the daily traffic trend.</p> <p>If Digg is pulling over 800K uniques per day, they should be pulling around $600K to $700K in ad revenue, or roughly $7M to $9M per year.</p> <p>Then again, they don't display a ton of ads - one simple bar at the top, so $3M is reasonable.</p> Only $3M/year? Sounds like they aren’t capitalizing on their viewers all that well… I’ve found that monthly revenues closely follow the daily traffic trend.

If Digg is pulling over 800K uniques per day, they should be pulling around $600K to $700K in ad revenue, or roughly $7M to $9M per year.

Then again, they don’t display a ton of ads – one simple bar at the top, so $3M is reasonable.

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