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Inc. Magazine Reprints Long Lost Copy of 2006 BusinessWeek Digg Article

Posted on October 27, 2008
Filed Under Unjournalism |

In 2006, BusinessWeek put its credibility in the hands of Sarah Lacy and came out a loser.

The business magazine’s fluffy portrayal of Digg as a potential “new New York Times” and of its founder, Kevin Rose, as the “‘It’ boy among a new wave of entrepreneurs running the hottest of the top 100 Web 2.0 companies” was quickly criticized by many. BusinessWeek’s choice to throw credibility out the window by headlining Rose’s cover “How This Kid Made $60 Million In 18 Months” certainly didn’t help an already lacking article.

Flash forward to today.

Digg is still sucking on a VC teat, Kevin Rose hasn’t made $60 million and every potential Digg suitor has thus far walked away. Most importantly, Digg’s position in the market really hasn’t changed since 2006, something that Rose admitted recently when he, in less dramatic terms, basically told News.com’s Caroline McCarthy “we’ve got to be more than a fanboy hub.”

In her regrettable BusinessWeek piece, Lacy claimed that “some smart money is on Digg to become an ad magnet à la MySpace.com.” By that measure, the “smart money” looks today like “dumb money.” Digg generates nowhere near the amount of revenue MySpace does (which is in the high 10-figure neighborhood) and it’s still highly-dependent on guaranteed payments from Microsoft (really dumb money).

But apparently a company that has been unable to turn geek popularity into geek profits in 2 years is “The Hottest Small Company in America.” That’s according to Inc. Magazine. Yes, the same Inc. Magazine that sponsored a bullshit social media study designed to hype the companies on its Inc. 500 list.

Inc.’s article, which glamorizes Digg and Kevin Rose, is eerily similar to BusinessWeek’s 2006 fluff piece. It tells us that “It’s Kevin Rose’s Internet; we’re just using it.” Given that I don’t visit Digg, don’t watch Revision69 and don’t use Pownce, I would beg to differ.

And not to be outdone by BusinessWeek’s “How This Kid Made $60 Million In 18 Months” hyperbole, Inc. proclaims (on its cover) that Rose is “Part Steve Jobs, part Howard Stern - this guy could be the next Rupert Murdoch.”

According to Inc., Rose has “captured the hearts and minds of the most desirable customers on the face of the planet.” Rich Arab sheiks? Russian oligarchs? Wealthy European aristocrats? South American drug lords? Hollywood moguls? New York socialites? Hedge fund managers who bet against subprime? No. Geeky first adopters who, ironically, don’t click on ads and who actually don’t buy anything from Rose.

Unfortunately, it appears that 26 year-old Max Chafkin, who wrote this Inc. hype piece, doesn’t recognize that “users” and “fans” are not “customers.” When I see hipsters walking down Sunset wearing $400 Digg denims and trendy new nightclubs paying K-Rose $150,000 to make a Saturday night appearance, we might have something to talk about.

Until then, Inc.’s article, which is accompanied by cheesy photos of hipster groupies chasing Rose around, seems downright curious in 2008.

Digg is so 2006 (which, incidentally, happens to be the year Chafkin joined Digg). And in case it’s not apparent to Inc. that Digg isn’t worth hyping at this stage of the game, perhaps Inc.’s editors should turn on the television or read the newspaper. They might learn that there’s a global financial crisis taking place that has VCs scrambling like rats to save a few crumbs. And they might learn that the hoopla around overhyped Web 2.0 startups that pull in less money than a new associate at a big law firm earns in his first year has died down.

Given all of these things, calling Digg the “Hottest Small Company in America” in 2008 is sort of like calling the Titanic the “Best Luxury Cruiseliner” in 1913. In other words, Inc. Magazine missed the boat.

Of course, none of this is surprising. Inc. is owned by Mansueto Ventures. The same Mansueto Ventures that publishes the bullshit-laced magazine Fast Company and that actually pays Robert Scoble. And it’s the same company that is looking for a few “experts” to produce content for FastCompany.com in exchange for little more than a pat on the back while it tries to sell ads at a $160 CPM.

Since the company just laid off staff and is obviously looking to cut costs, I can’t help but think that Mansueto Ventures would be better off if it just merged FastCompany with Inc. to produce the ultimate hipster business magazine - FastCompany, Inc.

In any case, BusinessWeek 2006 called and it wants its Digg article back.

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