Kevin Rose opens up and Diggs in, part 2

q&a MIAMI--In the first half of a leisurely chat at the Future of Web Apps conference, Digg founder Kevin Rose talked about open standards, improvements to the site, and his thoughts about some other companies' social news projects. Now, in part two, Rose discusses the problems with Web analytics, his high-profile side projects, and Digg's future amid escalating talk of economic uncertainty and "Bubble 2.0."

How is Digg going to have to evolve to stay relevant, with so many new ways of getting news, and emerging competitors?
Kevin Rose: I think that we'll take a big step in our evolution when we we launch the recommendations side of Digg.

Is the site going to look any different?
Rose: Yeah, it'll have slightly different navigation, and there'll be a whole section dedicated to introducing you to stories and people that you Digg in common with. But long-term, we need to make Digging as easy as possible. I think we could do some improvements in just making it an integrated experience into other sites so that if you're on, you know, the New York Times or others and you want to Digg something, it's not like a five-click step where you have to click, open Digg, find a story, Digg the story, log in--that's what I consider to be a little bit of a pain.

So would you consider something like the integrated pop-up windows on Facebook's Beacon partner sites?
Rose: I'm not a huge fan of sliding up or popping up something in front of a user's face, but the idea of seeing the Digg button and clicking it and not having to redirect you to anywhere else is a pretty cool one.

Going forward, what do you think your biggest challenge is?
Rose: That's a good question. (Long pause.) I think that we need to continue to explore, well, not only continue to improve our existing products, but also explore other verticals that we could get into.

Ooh, like what?
Rose: I definitely can't tell you about that stuff. (Laughs.) But Digg can be applied to a lot of different things outside just news, images, and videos. Anywhere where there's an overabundance of information that you can use a collaborative filter to sort through, to provide you with better results, I think that we could go there.

But one of our big challenges is always keeping the site simple, clean, lightweight, and useful, and not overcluttering it. We have a list of features in development that's a mile long, of stuff that we've thrown around of potential ideas that we want to do. I just would hate to see us turn into a big "bloatware" application. Being able to do some of these new things but still make the experience of the site easier to understand and useful to people (is a challenge).

You're kind of this icon of Web 2.0, at least from a mainstream perspective, but there's been a lot of talk about, obviously, economic downturns and whatnot. How is Digg, and how is this whole social-media industry in general, going to fare in the face of tougher economic conditions?
Rose: That's a good question. I think that you're going to see a lot of companies that are going after their Series B rounds of funding that don't have the traction and the users, that are just going to hit the wall and they're not really going to have any place to turn.

Are you concerned that if economic conditions get tougher and the ad market tightens up, that you'll feel forced to sell?

Rose: Digg has 25 million people a month coming to the Web site. We're not going anywhere. We have very strong financials, we have a very clear path to profitability, we have a small team. We're 50 employees.

And how long until you reach the end of that path to profitability?
Rose: We don't really talk about our financials, but it's nothing that I'm really concerned about. We could survive an economic downturn, that's not something we're worried about.

What about hardware and R&D costs?
Rose: Digg's very lightweight. We don't serve, you know, YouTube videos. So for us it's not like we have some crazy bandwidth bill at the end of the month. I mean, it's crazy, but it's not YouTube crazy.

You've also got two other companies where you're in a leadership capacity in one way or another. Do you ever get criticisms that you're spreading yourself too thin?
Rose: Well, that's very easy. Essentially, I started Digg and then Revision3 very shortly after...so Revision3 came out and the idea was to get a team together that could manage the business day-to-day and I could stay focused on Digg. So we did that, and hired a CEO.

I probably visit the Revision3 offices, I would say, once, maybe twice a month, something like that. So for me, outside of shooting Diggnation (Digg's video podcast, produced by Revision3), it's really easy. Every once in a while there will be something to handle over e-mail. I sit on the board, so I of course attend that meeting every month, but there's a very strong, awesome management team in place that handles it day to day.

As far as Pownce is concerned, it's really another little side project that I thought would be fun to do on the weekends. My time right now is our little Sunday get-together where we sit down for an hour and talk about what feature we're going to work on. There's only really one full-time developer on it right now, and that's Leah (Culver). So when the time comes, as we continue to grow, we'll do the same thing and put management in place and let it grow itself. But it's tricky. Of course, especially in the very early stages of starting another company, there's a lot of hand-holding that needs to go on. But if you do it right, it's possible. It won't kill you.

How are Pownce's growth numbers?
Rose: They're good. We have over 170,000 registered users. We're adding about 700 new users a day. They're really good.

How many of them keep coming back?
Rose: I'd have to look. We don't have that stat in Google Analytics, and I'd have to ask for a custom query from MySQL to find out. I mean, the problem is that there's so many people that use the downloadable app, and Analytics doesn't track that, and we have so many people who are commenting and responding and other things via the desktop app, and ones that are coming in through the Web site, and ones who are coming in through Pownce Mobile, which we don't have numbers on as well.

Overall, the numbers have been great. We've rolled out some new features. Leah's just preparing to roll out the API, so I suspect you'll see Pownce on a bunch of different devices and areas very soon.

On the question of analytics, obviously there's a lot of controversy there. There are people saying that current methods of audience measurement just don't work. What's your take on the whole debate?
Rose: It's a broken industry. There's a lot of confusion and misinformation out there about Web stats and traffic. The thing is, at the end of the day, it's really not going to matter unless it's really impacting your ad revenue. A lot of really large advertising firms and people that are buying and spending online determine who to advertise on based on things like your ComScore numbers. That system is severely broken.

At Digg we're using Quantcast to measure our stats. That's a much better system where they give you a piece of code that you put on every page so that they can verify the traffic and who's coming to your site, and that's a nice third-party site that people look to for traffic numbers.

But as far as sites like Pownce, the only thing that matters are the stats that we care about. We don't really want to share them with the outside world, we're not using them to raise money, we're using it for our own internal benchmarks.

What do you think is the stupidest thing that's getting done in Silicon Valley right now?
Rose: Oh, boy. I don't know. I really don't spend a whole lot of time on the stuff I don't like.

What, not even any egregiously over-the-top launch parties?
Rose: I try to avoid a lot of those launch parties. Things have died down a little bit over the last few months. It's not as crazy as it once was, you know, a year ago.

Read part 1 of the Kevin Rose interview.