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Digg on track for profitability with new ad system

Thu Nov 19 2009, 16:41 PM UTC

News recommendation site Digg is on the path to profitability, according to CEO Jay Adelson, thanks to new ad products that are generating better-than-expected returns. In an interview with Fox News, Adelson also claims that in future sites such as Digg will have a prominent role to play in creating a new economy around online news, without having to charge readers.

Adelson says the site’s new ad-rating product is generating an unexpectedly high click-through rate, helping the site monetise featured content effectively. The new ad product allows users to vote on how good an ad is, with Digg charging lower rates to the firms placing the most popular ads. Adelson also says pressure on sites such as Digg to create revenue has eased recently, allowing him to focus on growth and innovation.

Adelson is sceptical about Rupert Murdoch’s plans to place the online versions of his newspapers behind a paywall, saying users are likely to be reluctant to pay for what they are used to getting for free. However, he says that aggregation sites such as Digg could become part of the news chain, providing a place for consumers to discover the content they want to consume. In turn, the aggregators could give a slice of revenues to news producers.