Plenty of people have had a kick at the recent Business Week article on Kevin Rose and Digg — in some cases a Chuck Norris-style roundhouse kick, such as the one delivered by Jason at 37signals — and it seems to me that (as with so many articles in the media) one of the big problems is the headline, and it boils down to the use of the word “made.” As in Kevin Rose, the guy who “made” $60-million in 18 months.
In reality, of course, Kevin hasn’t really “made” anything, regardless of how Chris Pirillo wants to define the word. Or rather, he has made something — a tremendously useful and popular social-networking tool — but he certainly hasn’t made $60-million. It’s possible that the “people in the know” quoted in the article are right about the value of Digg, but that still doesn’t mean Kevin Rose has “made” $60-million. Even if you assume that venture capitalists put enough money into the company to give it a value of $200-million, he still wouldn’t come close to having actually “made” $60-million.
No offence meant to the authors, but articles like the one in Business Week are not difficult to write — just find someone who has valued MySpace at $3-billion or Facebook.com at $1-billion or whatever, and then divide that number by the percentage held by the subject of your piece. Or find someone who has valued users of (enter social-networking service here) at x dollars each, and then multiply by the number of users at MySpace or Facebook or Digg or whatever you want to write about.
Awhile back, everyone was having a pile of fun taking what Jason Calacanis sold Weblogs Inc. for and dividing by the number of readers, and then multiplying by the number of readers on their own blogs (I’ve got a couple of valuation widgets on the left-hand side of my blog, but I wouldn’t believe either one of them). The Business Week article on Digg is no different. It makes for a great cover line, and it probably gets people to read, but it should be taken with a giant block of salt.
As I suspected, editing changes and a desire for a snappy cover line seem to be the cause of much of the hoopla. And Stephen Baker of Business Week tries his best to argue that “value” is a nebulous concept, and therefore the story and the number were justified. That’s a nice try, Steve — but all it really means is that the rankings of rich people done by business magazines are also highly suspect. And regardless of valuation, it still doesn’t mean Kevin Rose has “made” $60-million. Period. Which Kevin himself freely admits.