(First published on the Compete.com blog on 11/08/2007)

Is Digg close to a $300 million sale?

Good thing Digg didn’t sell itself a year ago. Digg has performed spectacularly in the past 12 months. All key user and engagement metrics are up dramatically for the site:

Now I know Facebook and Digg are fundamentally different services, it’s an interesting head to head comparison nevertheless:

• Even though Digg’s and Facebook’s unique visitor numbers aren’t that far apart, the engagement metrics reveal fundamental valuation driving differences between the two sites.
• Facebook users are much more engaged with the site. They come back to the site more often, spend more time, and view more pages. Most important – most Facebook users have user accounts, have to be signed in to use any Facebook feature, and voluntarily share lots of juicy facts about themselves with Facebook. This has to be the main driver behind Facebook’s lofty $620/unique visitor valuation.
• Interesting that both have multi-year multi-million dollar ad deals with Microsoft.

Will Digg get acquired soon? We’ll find out soon enough. Maybe Microsoft should use some of its $18.8 billion war chest (again) to buy a small piece of Digg in its bid to catch up with Google/Yahoo/Fox in the social networking game. After all, Microsoft already has a $100 million ad deal with Digg.

Guy Kawasaki is a managing director of Garage Technology Ventures, Technorati 50 blogger, and a columnist for Entrepreneur Magazine. He was an Apple Fellow at Apple Computer, Inc. His job description at Apple was “to protect and preserve the Macintosh cult by doing whatever he had to do” — how cool is that?!

Guy is also the author of eight books including The Art of the Start (a must read).

A few weeks ago, Guy asked Stephen DiMarco and myself 10 questions. We discussed how Compete competes with Alexa and Comscore, how Compete does what it does, site metrics, and Search Engine Optimization practices.

Enjoy! — Ten Questions with Compete (October 29, 2007)

The Questions (responses):

• What exactly does Compete do?
• What did your investors say when you started giving away your data for free?
• Do your stats include Macintosh users and Firefox users?
• How are your results different from Alexa and Comscore?
• Then should we all remove our Alexa bookmarks and replace them with Compete?
• Is SEO black magic and bull shiitake or can one increase traffic with a few changes to headers, keywords, etc?
• There’s often a 10x difference between my server logs and Google Analytics say is my traffic. What accounts for this?
• Then when people ask, do I give the log answer or the Google Analytics answer?
• Everyone else is lying, do I lie too or look less successful?
• What are the most common mistakes that companies make that yields sub-optimal traffic?
• Then what can I do to increase traffic at Truemors?
• In two years what will be the top five social networking sites (in order from largest to smallest)?