The ever present social news site Digg has been on the hunt for a PR firm according to a post on PRWeek. According to industry news sources, Digg has narrowed the search to four companies Digg’s PR director Kiersten Hollars would not disclose any information, nor would Digg’s former external PR partner Karbo/Fonkalsrud Communications.
A recent article on BusinessWeek further reveals Digg’s financial dillema, as insider information has the company’s valuation receding and apparently its investors running scared. Original valuations for the social media giant ran as high as $300 million, but no buyers emerged. With the economy grinding to a halt nearly, it is no secret that Venture monies are as scarce as hen’s teeth these days.
From information I received some weeks ago, Digg is not the only notable online venture in the frying pan. I am not at liberty to speak categorically, but many investors in Silicon Valley have truck loads of cash out, with no indication their drivers will ever return. This is simple logic even without insider information, as hundreds of startups have been launched and only a scarce few have ever turned a profit. The big question for investors and startup developers alike is; “If Digg cannot make money with 35 million users, how can smaller communities?”
I should title this “no brainers” for those with deep pockets and lots of enthusiasm. It will be interesting to see how Digg#s new PR firm handles all this negative PR. I think the best action would be total transparency before someone hollers BS. This is just my opinion, but any good PR these days would likely agree. No comment in these situations usually means; “OH MY GOD!” in my experience. I can hear those investors on the phone now; “You assured me and my wife Becky that our house in the Hamptons was not at risk!” Good luck to the lucky winners of the Digg contract.