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Popular news-collection and social-networking Web site Digg.com is cutting back its workforce in hopes of achieving profitability. The San Francisco, Calif.-based company will reduce its staff of 75 people by 10 percent, according to founder Jay Adelson.

Adelson said the company’s goal is to become profitable this year and can only do so by being more conservative. He founded the company in October 2004 and has pulled in $40 million in funding, including a $28 million round just four months ago.

“This means we’ll be taking proactive measures to manage our costs, including a head-count reduction in certain areas that are less core to this year’s objectives while continuing to hire for roles that will help build on our leadership position and get us to profitability faster,” Adelson wrote in a Digg blog.

To reach its goal, Digg’s management team plans to hire a direct-sales team in addition to other “targeted hires.”

Things To Do

Digg has other things on its to-do list, including rolling out new features for its more than 35 million-member community, focusing on sponsorship opportunities, and continuing with publisher and trade partnerships.

One critical step for the company is to work on expanding its advertising strategy and building on its partnership with Microsoft to sell ads. Digg’s three-year, revenue-sharing deal with Microsoft began in July 2007 after Digg considered Yahoo and Google as partners. The contract is up next summer.

“I’m confident that with commitment and focus on these priorities, Digg will be an even stronger company in 2009 and will continue to create innovative features for our more than 35 million community members,” Adelson said.

Competition Heats Up

While Digg begins to refocus, competition is getting stronger. Last week, visitors to Twitter, another popular social-networking and news site, surpassed Digg for the first time, according to Hitwise, an Internet…

Source: newsfactor.com

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Not long ago, it seemed that four companies would forever dominate the Web in traffic and ad dollars. Each of the Big Four — Google, Yahoo!, Microsoft’s MSN, and Time Warner’s AOL — attracts more than 100 million unique visitors a month. Collectively the group accounts for roughly 90 percent of gross ad dollars online. So far, so good.

But now those companies are facing a threat to their dominance. I’m not talking about the recessionary headwinds that have slowed growth even for mighty Google. Nor is this about the self-inflicted wounds that have weakened the positions of the other three players. Yahoo spent the last year in turmoil following Microsoft’s takeover offer, inducing Carl Icahn to elbow his way onto the board and then force out CEO Jerry Yang as business conditions grew increasingly dire. AOL is hardly better off. Its former CEO, Jonathan Miller, freely admits that AOL essentially missed the boat on social media and the decline of AOL’s legacy connectivity business. Microsoft failed to acquire Yahoo and continues in vain to seek a credible competitive response to Google’s search advertising juggernaut.

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