Last summer we’d heard that the Digg board of directors was considering terminating Digg cofounder and CEO Jay Adelson. But everything was fine, said senior Digg employees, and the fact that the company moved Adelson out to California from New York at about that time was shown as evidence that the rumors were false. But one ominous conversation I had with Kevin Rose a couple of months later stuck with me. “One of us will leave the company,” he told me, venting some frustration he had with Jay.
And that frustration led Kevin to slowly withdraw from Digg. He hasn’t been seen regularly around the office “in about a year” says a source inside the company, and he had no specific job duties. Product had largely been taken over by Keval Desai, who joined the company from Google last November.
But Kevin’s and investor’s frustration over the direction of the company grew. V4 of Digg, which was supposed to launch in 2009, is only now being finalized.
So the board made their move, and Kevin is back at Digg in a full time role. Today the company announced that Jay has left the company, and Kevin Rose, who hasn’t been completely focused on Digg day to day, is taking the acting CEO role.
Kevin is unsatisfied with V4 of Digg, we’ve heard, and plans to change it dramatically (look for more delays on the launch). Other minor frustrations also bubbled up, like the fact that Digg has no iPad strategy while other media companies are jumping in head first.
Still, it’s an odd move. Even though Digg is clearly not on the same trajectory as Twitter and some other companies, they are profitable and are on track to hit $30 million in revenue this year. So whatever happened at Digg seems to be largely a personal issue between Kevin and Jay, and the board had to make a decision. They apparently made the decision they had to make. Digg without Kevin Rose isn’t really Digg any more. But it may be hard for the company to find a high quality CEO to take Jay’s spot, knowing that Kevin is really the guy who runs the company.
Here are the official statements from Digg, which have no useful information at all about what really happened:
Update from Jay:
Got some news. After five years, forty million users, and an amazing
ride, I’ve decided to step down as CEO of Digg. With the new Digg
getting ready to launch, Digg Ads doing well, our sales force growing,
our hiring ramping, and the company maturing well beyond its startup
phase, I feel that now is the right time.
The entrepreneurial calling is strong, and I am ready to incubate some
new business ideas over the next twelve months. As the economy exits
a very deep recession, I believe that it is an excellent time for new
companies to develop. Of course, I will continue to serve as an
adviser to Digg. In the interim, Kevin has agreed to step in as
Chairman and CEO.
I’d like to thank Kevin, the Digg staff and the Digg community for
their support, insight and, most of all, their loyalty in turning Digg
into the force that it is today.
Update from Kevin:
I want to be the first to thank Jay for the last five years of amazing
work. You’ve been a great friend and mentor, we wouldn’t be where we
are today if it wasn’t for you.
While I’ll miss working with Jay day-to-day I am excited to be taking on
the role of Chairman and acting CEO, driving Digg forward on our
promise to enable social curation of the world’s content and the
conversation around it. We’ve been super busy on the product side
getting ready for the upcoming Digg redesign and delivering our mobile
apps for the iPhone and Android.
Thank you very much for your on-going support of Digg, I’m truly
excited about the next five years, big things coming!
Digg is a user driven social content website. Everything on Digg is user-submitted. After you submit content, other people read your submission and “Digg” what they like best. If your story receives enough Diggs, it’s promoted to the front page for other visitors to see. Kevin Rose came up with the idea for Digg in the fall of 2004. He found programmer Owen Byrne through eLance and paid him $10/hour to develop the idea. In addition, Rose paid $99...
Currently, Jay serves on some boards as well as advises a number of companies. In May, 2012, Jay sold Revision3 Corporation to Discovery Communications. Most recently, Jay Adelson served as CEO of SimpleGeo, Inc. As Chief Executive, Jay was responsible for developing a business strategy and executing on the promise of location awareness services. The founders and board asked Jay to join to lead the company towards that end and if necessary, drive toward an acceptable exit. Jay sold the company...
Kevin Rose is a Partner at Google Ventures, where he primarily focuses on early-stage and seed investments. Prior to joining Google Ventures, Kevin co-founded Milk, a mobile application development company in San Francisco. Previously Kevin was the founder of Digg, and co-founder of Revision3, and Pownce (acquired by Six Apart). In addition, Rose is the founder of Foundation, a private newsletter and podcast, and formerly was co-host of the tech news podcast Diggnation.