The Social

Digg founder Kevin Rose, in a photo taken at the last Future of Web Apps conference in Miami.

(Credit: Caroline McCarthy/CNET News)

LONDON--In the first part of our interview with Digg founder Kevin Rose at the Future of Web Apps conference, CNET News asked the Web start-up poster boy about everything from the company's Series C funding round to whether he's concerned about when those election stories stop rolling in.

In part 2, Rose got a little more specific: What would happen if Digg got hit with a stock-plunging news hoax? Will he be making acquisitions? And most importantly, does "digg" mean anything dirty in any foreign languages?

CNN had that big debacle with a user-submitted story, about Steve Jobs having a heart attack, which turned out to be fabricated. What's your policy for what happens if something gets "dugg" that isn't true and which could have a big impact on stock performance or elsewhere?
Rose: The good news is that we have a lot of people that are actively looking for that and who flag and bury content based on whether or not it's inaccurate. There's probably not a day that goes by that there isn't a piece of content flagged on the site as inaccurate.

Do you employ anyone to keep tabs on that?
Rose: No. This is all done by the masses. We're fortunate enough to have millions of people come to the site every day, and thousands of people vote. (They can say), "this is bad," and we can apply that tag to it. We'll display a little stamp that gives a warning that the community has flagged it as potentially inaccurate. We see that every single day.

If a company serves a takedown notice because something was dugg about them that isn't true, would you comply? In the past you've been very vocal about not interfering with the community.
Rose: We'll only take things down that we receive like DMCA cease-and-desists that come to us. Often it's something like that there's a link to a pirated copy of Photoshop. But normally that sort of thing gets buried on its own because users won't promote piracy directly...We get a few a month but it's never a big deal because it's usually just blatant piracy.

So talk about internationalization. It's coming late next year. As a bit of a hint, are there any countries where Digg is extremely popular and a language translation might make sense?
Rose: Well, London is our largest city overall. But outside of that, as far as different languages are concerned, there is demand from certain users coming in and writing to us, but we see a lot of Digg-type clone sites, and those are the ones that we kind of keep tabs on. So we say, OK, where are our competitors and how are they doing? There's a Spanish version of Digg, there's a German version of Digg that's called Yigg or something like that.

And they're unofficial, or do they use your API or anything like that?
Rose: They're unofficial. They do their own thing. And then there's also a Digg in Japan that has some traction as well. So we look at this stuff and we say, OK, what do we do? Do we open up a version of Digg out there? Do we acquire these companies? It's all stuff that we talk about and I think that where you'll see this expand first is a combination of both requests from users and where our competitors are starting to take off.

So you might acquire a smaller competitor?
Rose: Sure, potentially.

Would you look at all into "crowd-sourced" language translations that we're seeing on sites like Facebook and Hi5?
Rose: The translation, we don't have a ton of things that would need to be translated. It's not like we would be translating the U.S. submissions. It would be their own submissions and a whole separate engine running an instance of Digg outside of our own, but still connected so that you could go to the U.S. version of Digg and it would show up in your profile and everything. But yeah, I don't think we're that far along. Right now we're just looking at different areas and where we want to expand and the code that will be needed to make that happen. It's all stuff that we'll be doing over the next couple of months.

Do you have any offices outside of San Francisco now?
Rose: We have a small group of people. We have someone that's working for us in Scotland and also someone that's working for us in Amsterdam. No official Digg logo on the side of a building anywhere.

So do you have any plans to open more offices?
Rose: I'm sure, eventually.

When you expand internationally, you're not going to have to change the name of the site or anything? It doesn't mean anything offensive in any language?
Rose: Somebody told me it did in one language. I can't remember what it was.

Your talk today was about the future of news. How do you see yourself in the news industry as a whole, beyond the niche of social news?
Rose: I don't know that we do actually. I think we're just kind of that platform to level the playing field. We will never become a news publisher in any way, in that we won't produce our own content or host other peoples' articles. We'll always be kind of directing the flow of traffic.

When you expand into other countries and if you launch localized versions, are you planning to have to deal with governments that may not agree with Digg's views on freedom of information?
Rose: Absolutely. I think that we have always wanted to create a neutral, level playing field, and I would not be OK with changing that point of view when it comes to Digg. I'm not going to bend our rules when it comes to story promotion or our algorithms that look for a unique, diverse crowd of people thinking that something is interesting, and wouldn't allow anyone, any government to manipulate that. That might mean that we can't actively compete in some markets, but those are kind of our core principles, and those will never be compromised.

You were talking a lot about how you've got a ton of data that you haven't sourced out yet. Have you thought at all about adding an additional revenue stream by licensing analytics to clients?
Rose: Yeah, one of the big things that our business development team spends a lot of time working on is relationships with publishers. They're constantly coming to us and saying that (we) have a lot of data about their users--what they do, what they enjoy, where they're coming from, what other articles and other sites they're posting on--and it would be cool if we could get some of that data into a type of dashboard.

That's all things that we're looking at as far as tools for publishers, like some of the other things I mentioned today like a recommendation engine for publishers. It's definitely on the road map and it's stuff we want to develop, but it's just important that I'm not going to build a custom suite for CNN and not provide it to a blogger. I just want to make sure that when we do build a tool, it's available to everyone.

At this conference, there are a ton of young independent developers eager to learn. Given this financial climate, things are tougher when it comes to getting venture funding or getting a job. What would your advice to them be?
Rose: E-mail us at jobs dot digg dot com. (Laughs.) You're absolutely right in that I've talked to a lot of investors recently, some of our angels, a couple of VCs, that I know and communicate with, and it's definitely a weird time right now. Start-ups that don't have traction and don't have that kind of hockey-stick-like growth on Alexa or Compete or whatever are going to have a really difficult time raising an additional round of funding. I think that a lot of the advice going out there to start-ups right now is to pare back a little bit and get into a mode that you can survive in.

There's a way to, they call it, "raise an internal round" of funding just by cutting back on things that you don't absolutely need. Cut that out of the budget and it's like raising money because you're not spending it. I really unfortunately think that there's going to be a lot of start-ups that go by the wayside in the next 12 months. The advice I hear out there is that if you can raise money, now's the time to do it and then just put your head down for the next couple years. I know a lot of start-ups are trying to do that.

LONDON--Perhaps it's fitting that Digg founder Kevin Rose chose the Future of Web Apps conference here as the place to elaborate on his company's international expansion strategy. London, after all, has become the San Francisco-based Digg's biggest hub of user activity. But with headlines dominated by financial disasters, life gets a little more complicated for a company determined to build up and keep hiring.

CNET News caught up with Rose shortly after his presentation on Thursday morning. Here's the first part of our two-part interview.

You're a geek hero. You've got a huge following. How much do you want to be "the Digg guy," especially as Digg is expanding and moving beyond its roots?
Rose: Well, I absolutely love my job. It doesn't feel like I'm working, ever, so that's a nice place to be in when you've spent the last four years feeling like you don't have a job and it's just something you enjoy doing every day. So I don't think that's going to get old for quite some time. I'll be at Digg for a while.

Digg founder Kevin Rose, who has since gotten a much shorter haircut.

(Credit: Caroline McCarthy/CNET News)

So what about being such a cult figure (as host of the Diggnation podcast)?
Rose: There's a lot of people that watch our podcast, and enjoy our podcast and say, hey, you know, you guys are funny because we get there and drink beers and comment on our favorite technology and geek-culture stories, so there's that group of people who enjoy what we do as far as making the podcast. I don't know, I'm just happy that people watch and that people enjoy what we're doing. Alex (Albrecht, Diggnation's co-host) and I, when we started the podcast, we really didn't have any idea how many people were going to be into it. We were just, like, "Hey, we used to work together at TechTV, why not just do something fun and hit record?" Even if nobody watches we'll still continue to do it because we like hanging out.

You said earlier this morning that Digg's going to focus on expanding its appeal, that right now only a tenth of Digg's visitors have registered for user accounts. Is Diggnation going to change, too?
Rose: No, Diggnation will always stay the same. It's just kind of a fun show. Only a small percentage of the people who watch Diggnation actually go to Digg, there's only about 250,000 people per week that watch Diggnation, and Digg has millions and millions of people. So it's not like they're really closely tied together.

You said you're going to stay at Digg for a while. You just raised a big Series C round. Does this mean the company's going to stay independent (i.e. not get bought) for longer than originally planned?
Rose: The nice thing about the last raise is that it wasn't, like "oh, we're out of money, we need to raise more," it was more based on the fact that we knew we wanted to expand into different languages and we knew we had to buy racks of servers over in Europe, and all that takes capital to make happen.

We sat down and said, okay, where do we want to be a few years from now and what are the resources that we need to make that happen? We would've ran out of cash had we executed on that plan to expand internationally. That raise was really, okay, let's build the team that we need in San Francisco to continue to evolve the product, and invest in R&D and continue to scale the site, but at the same time let's talk about international next year. So that's what this is for.

What about other social news sites? Are any of them doing things that Digg isn't that you're hoping to emulate in one way or another?
Rose: That's a good question. I really don't use anybody else's product. I've never used their services at all, I think I've maybe "buzzed" one article when (Yahoo Buzz) first came out. We don't really base our product decisions on what anybody else is doing.

But there's been no instance where you saw something really cool and wished you'd thought of it first?
Rose: I've seen some really interesting mashups of other peoples' data that are really fun to play around with, and I've thought it would be really cool to see what Digg data looks like with that, but I can't think of any one feature. I think some of the stuff that StumbleUpon is doing with their toolbar and providing recommendations in the toolbar is really interesting to us, but not right now. We have a very basic toolbar right now today.

How has the current financial situation changed things at Digg? That stuff really started to unfold right after you raised your Series C round.
Rose: Nothing's changed. One of the nice things about Digg is we've always run fairly lean. We have a small team and we're a very text-heavy site, so as far as bandwidth is concerned it's not like we're YouTube spending a million dollars a week on bandwidth. For us it's just always being conscious of who we're hiring and why we're hiring them, and do we need that person or not. We won't be a 400-person company in a year or two years. It's just picking the spots where we need some help and growing slowly, and staging that growth so it mirrors our own Web traffic growth...it's always been out of necessity.

Are you anticipating a traffic drop after the election?
Rose: We don't anticipate that, no. That's a good question though...we've always seen traffic grow month over month. We're fortunate enough to be in that position, and we've seen the different bumps as little things that come along. When the Olympics was going on we saw a little bump ther. When there's big tech news or Apple events you always see bumps there. We'll have to see. We haven't really done any estimates on that.

Bebo co-founder Michael Birch (left) in an interview with Craigslist CEO Jim Buckmaster at the Glasshouse event on Monday night in San Francisco. And a few beers.

(Credit: Caroline McCarthy/CNET News.com)

SAN FRANCISCO--It's kind of cheating to showcase the dotcom scene by hosting an event featuring Bebo co-founder Michael Birch and Craigslist CEO Jim Buckmaster. An outsider, observing Buckmaster's interview of Birch on Monday night as part of the Glasshouse salon series on entrepreneurialism, would get the idea that Web 2.0's scions must all be tall, stylish, and exceptionally good-looking.

That outsider would also get the idea that Silicon Valley had the comic timing of Juno, as it was, for the most part, a witty and borderline tongue-and-cheek interview. Bebo's success, Birch said, was "was mainly due to (his) pure brilliance." Buckmaster then reminded Birch that his site could no longer claim to be No. 1 in the U.K., where it had sat on top of the social-media scene before Facebook passed it in reach.

"You still have New Zealand and Fiji, I know," Buckmaster said at the event, held at an expansive new bar called Orson in the heart of San Francisco's start-up-heavy SoMa neighborhood.

"Fiji is an up-and-coming market," Birch replied.

The witty banter was amusing. But want to know the funniest part? Birch's site was sold to AOL for a monstrous $850 million and the interview didn't even touch upon it until audience members (including yours truly) brought it up.

Rather, most of the discussion between the two was centered on Bebo's raison d'etre and its short history (the site was founded in 2005). Buckmaster brought up server problems that came close to halting the site in the manner of Friendster, and Birch replied candidly. "It was quite challenging," he said. "It kind of grew, and then it stopped growing because it wasn't working very well, and then we would fix things and it would start working again."

The audience additionally learned that the British-born Birch prefers fish and chips to hamburgers and that his biggest headache on the site is the occasional whiny teenager. "I think Bebo's single issue we've had is people being mean to other people and trying to solve these life disputes," he said. "You get these e-mails like, 'Jennifer was really mean to me at school today. Can you cancel her Bebo account?'"

There was also talk of the "Open Media Platform," a strategy Bebo launched to bring professionally-produced video and audio content from partners like CBS and MTV onto the site. "Bebo has been called the first social media network," Buckmaster said. "Is that just marketing hype or is there something to that?"

"It's not just marketing hype, it's incredibly good marketing hype," Birch answered to laughter. "We kind of tried to think how we differentiate, because there's these other two Web sites (Facebook and MySpace)...We have to differentiate, so we thought we'd take the best of both, which was the common utility of one and the media of another, and blend them into one."

He elaborated: "We've always been a much more media-centric site. So where Facebook is openly non-media focused, and MySpace is very media focused, we wanted to become 'media' but in the way Facebook had done it, with the widgets and applications."

Buckmaster also asked what it was like for Birch to work on a site with his wife, co-founder Xochi Birch, and brother Paul Birch. "It's really nice working with my wife," Birch said. "My brother is OK. It's been fine. We're still related. Normally, you start a Web site with friends and it's like, 'Are you still friends?' And often you're not...but (Paul and I) are still related. And friends."

Cute. But what about AOL?

As the event was winding down and the Craigslist exec had only a few questions left, I figured finally they'd touch upon the acquisition. No such luck. "I understand that you had short hair in the U.K., and you only grew it out when you moved to the Bay Area," Buckmaster observed in reference to Birch's shoulder-length locks.

"I always understood it as camouflage in Haight-Ashbury," Birch said.

The discussion was then opened up to questions and answers, and I seized the opportunity to ask the two why neither the term "AOL" nor "$850 million" had surfaced at all throughout the interview.

"850 million is an interesting number. It's a lot bigger than some numbers and a lot smaller than some numbers," Birch responded jokingly. "It's not a prime number." Finally, he addressed the acquisition directly. "There were many other companies (as potential buyers)... It came down to fit," Birch said. More specifically, it came down to AOL's AIM client, which will see deep integration with Bebo. Birch said it offered a much more intimate social-networking experience. "You connect with friends who actually mean something to you, and no one's actually exploited that social graph."

But no matter how press-conference-worthy the questions were, the levity remained. When someone in the back of the room asked Birch where the $850 million valuation at the time of the AOL buy came from, the Bebo founder answered accordingly. "Eight hundred million," Birch said, "was for Fiji."

AUSTIN, Texas--Mark Zuckerberg probably knew his keynote address at the South by Southwest Interactive Festival would produce a lot of press, but he likely didn't expect it to turn out the way it did.

CNET News.com sat down to chat with the young Facebook founder fewer than 24 hours after the widely criticized onstage interview with BusinessWeek journalist Sarah Lacy, in which a disappointed audience turned on Lacy and demanded better questions.

After the media flurry, Zuckerberg was understandably eager to move on and talk about different topics. But he still touched upon the incident, hinting that while he may not have been totally thrilled with the subject matter, he thought Lacy was still getting unnecessarily hounded.

The interview between journalist Sarah Lacy and Facebook CEO Mark Zuckerberg got ugly quick and then went downhill.

(Credit: Caroline McCarthy/CNET News.com)

"I thought she asked some interesting questions," Zuckerberg said. "We may have not talked about the things that were most relevant to the audience that was here, but I've worked with Sarah on a number of pieces, and I generally think she's really smart and didn't necessarily deserve the reaction that people gave her."

It wasn't the first time a crowd has started to get a bit energetic, Zuckerberg said. He likes to put a positive spin on it. "People shout things out because they're excited and passionate about what we're doing," he said. "People were shouting out things about, like, Beacon and privacy and things like that. Those were good questions for people to ask."

I asked Zuckerberg half-jokingly if he'd ever subject himself to an interview on The Colbert Report, where host Stephen Colbert has become notorious for putting interview subjects in extremely uncomfortable situations. Zuckerberg wouldn't give a definite answer, but he did say he thinks Colbert is "so funny."

Getting past the hype
Regardless of the media buzz over the SXSWi interview, Zuckerberg said he's still enjoyed himself at SXSWi. "It's been pretty interesting," he said. "I went to this panel on the worst Web sites...it was pretty funny."

But back to Facebook. Zuckerberg has said he would prefer if people focus less on the sensation--the backlash against Lacy, the press over Facebook's $15 billion valuation, his status as the youngest person that Forbes magazine has ever named to its list of billionaires--and more on what his company is actually doing. He reiterated that wish in Monday's interview.

"I feel like a lot of the press coverage around the company is on a few phenomenal events," he said, adding that he'd prefer to talk about "the way in which we help people interact and communicate, both on a subtle level of helping people make connections and increase the number of people that they can keep up relationships with, and increase their trust...(and) the sum of all those connections, and all that communication that's being enabled through the service."

Mark Zuckerberg

(Credit: From Zuckerberg's Facebook page)

OK, fair enough. But he's still Mark Zuckerberg, the tech industry's current wunderkind and Generation Y's foremost example of a future business leader. In today's atmosphere of Project Red, U2's Bono as a Silicon Valley investor, and Bill Gates' "creative capitalism," every high-profile CEO is getting asked how he or she will help save the world. That came up for quite a bit of time in Sunday afternoon's keynote interview with Lacy.

But Zuckerberg said that for Facebook, it's way too early to think about that sort of thing. "I think at this point, because we're not incredibly profitable, we're not at that stage of the company--hopefully we get there--that's not really something that we can do a lot of," he admitted in Monday's interview. "But I'd like to think that just what the company is trying to do in general, just helping people communicate, is actually making the world better."

"A lot of people are actually building really interesting applications that are more to the tone of traditional philanthropy, like the Causes application," he added. "Just by making this development platform, we're enabling some of those things. The way that we're going about it isn't by donating money directly to charity."

Cutting the app spam
Zuckerberg, who steered clear of some of his usual buzz phrases like "social graph" and "social utility," repeatedly stressed that Facebook is a young company and that its focus right now is on growth. Over the next few months, member profiles will be getting a redesign so that the interface is cleaner and runs more smoothly--and cuts down on many of the developer applications that have earned a reputation for being annoying, "spammy," or pointless.

"The direction that it was going in with a lot of platform applications--people would just install a lot of applications," Zuckerberg said. "It wasn't clear that they actually wanted a lot of the boxes that they had in their profiles, but a lot of people didn't take the effort to clean them up, and that kind of made profiles a little more cluttered than we would have wanted, and that also contributed to them being a little slower than we would have wanted."

Consequently, in conjunction with the profile redesign, the developer platform will be getting a bit "smarter." Members will be able to send out more invitations to their friends to join an application, as well as see activity from it in news feeds across the site, if it has high levels of user engagement and people actually like it.

"If an app where almost every request that gets sent gets accepted or that the person acts on it and enjoys receiving that request, then that app should be able to send way more requests or prompt users to send way more requests," Zuckerberg explained.

Conversely, he said, this will cut down on applications that spread by spamming members who don't actually end up using it. "If an app has a lower acceptance rate, we'd let them publish (fewer) requests...it definitely makes sense that the apps that are providing the most trustworthy and the most useful information will get to publish the most information into people's feeds."

He didn't provide many technicalities, but he insisted that small-time developers shouldn't be concerned that this means only the likes of big application development companies like RockYou and Slide will get exposure on the site.

"They should actually be pretty excited about this because if they're actually providing trustworthy information, then they'll be able to get way more distribution from this than they ever were under the old system," he said.

Zuckerberg also touched upon a longstanding Facebook rumor, namely the impending launch of an internal payment system that could allow developers to integrate PayPal-like functions into their applications and potentially provide Facebook with a new source of revenue besides advertising. He claimed, however, that the priority is to help developers rather than jack up Facebook's profit margin.

"Most of the revenue things that we're doing in the short term--their focus isn't on building a large revenue stream," Zuckerberg said.

Adding a payment system just makes sense, he added. "With a lot of applications, people need to pay for different things...You could go with an example like SuperPoke, with which people are buying sets of icons or signals that they can send to friends, which is purely a social gesture, but it's real capital that's being exchanged, or if you go with an example like a book or a song or something like that...A lot of these things can be inherently social or have large social components, and just kind of further the type of communication that's going on, but it involves real economic capital."

Looking at Facebook's future
Some critics have said Facebook is going to have issues handling the hardware to support new features and increased growth. Zuckerberg insisted that it's not that hard.

"We have multiple data centers. We have a couple on the West Coast. We have somewhat of a cluster on the East Coast too," he said. "We basically have this model where we can just put servers anywhere."

But maintaining adequate hardware is necessary to speed the site up, Zuckerberg said. "It can take almost 100 milliseconds round-trip for the physical packets to get from the West Coast to the East Coast, and it can take another hundred milliseconds or so to get to Europe. So I think just having more proximate data centers is an important thing."

And on whether the shaky forecast for the U.S. economy will get in the way of that kind of growth, Zuckerberg said he's not too concerned. "I don't spend that much time studying the overall economic climate, even though people seem to think that there's this general slowdown going on," he said. "It may slow down slightly, or it may not be affected, but in general, our growth is so rapid that I would be pretty surprised if it got affected in a meaningful way."

Besides a potentially tougher economic climate, there's also the prospect of competition on the horizon. Facebook is not a part of the OpenSocial developer initiative that Google has kick-started for social-media sites, and Zuckerberg says the company still hasn't made its mind up about whether to get on board in the future.

Back in November, he'd voiced concerns about how secure the new standard would be. "My stance then was that it had iterations to go, but that Google is very talented at developing these things," Zuckerberg explained. "We're still kind of in somewhat of the same place, where it hasn't launched yet. So we're still kind of waiting to see how it plays out. I have a lot of confidence in those guys."

And, he added, the way to compete is to keep innovating. "I think that what we're watching out for is not one specific company, but just how the whole trend goes and what our role is going to be," Zuckerberg explained.

"Most of the social services that people use aren't going to be built by us," he said. "And that's cool. That's a good way to be. And so if Google's building some stuff, it could be completely complementary with us, but it's probably also going to move the ecosystem forward. We just kind of want to watch the direction that things are going in."

See more stories in CNET News.com's coverage of SXSWi.

q&a On Tuesday, Facebook announced that it had hired six-year Google veteran Sheryl Sandberg as its chief operating officer, a big move as the hot social network attempts to convince the Valley that it's here to stay and slated to keep growing fast.

Facebook founder Mark Zuckerberg had a few minutes to chat on the phone about Sandberg's new role at the company.

The 23-year-old CEO insisted that Sandberg isn't a pure replacement for outgoing executive Owen Van Natta. From what it sounds like, her role will be significantly more extensive. Not surprisingly, she's going to be in charge of keeping things running smoothly--and probably keeping Facebook's young executives in line, too.

Do you think this is going to help advertiser confidence?
Mark Zuckerberg: The reason why we did this is primarily to scale all of our different business operations. Advertising is definitely one piece of that, and Sheryl has a lot of experience there. But the primary reason why we did this is just because Facebook is scaling very quickly, and if we want to reach our goal, which is to help everyone in the world communicate more efficiently, we need to build an organization that's going to grow and scale globally. And someone like Sheryl, who has experience doing this, is going to be a tremendous asset to us in doing that.

Sheryl Sandberg is the latest in a handful of high-profile Google employees hired at Facebook (i.e. Benjamin Ling, Gideon Yu). Are we seeing a "Google-ization" of Facebook here?
Zuckerberg: I think there are a lot of really interesting companies out there, and different experiences that people have before they joined here. (Sandberg) is really the only senior executive at the company who's come from Google so far. Gideon (Yu) was at Google for a very short period of time after YouTube was sold to Google, but that's not his primary experience.

What will be the first area where we see Sandberg's influence and expertise at Facebook?
Zuckerberg: I think it's going to be subtle in a lot of ways because the nature of operations is that you're scaling an organization and powering other people. It's not that Sheryl is going to be doing all these things herself, but Facebook already has 500 employees and it's scaling very quickly, and I think it's just going to go a lot more smoothly with someone who's talented like her here.

How will her role be different from Owen Van Natta's role as chief operating officer and then chief revenue officer?
Zuckerberg: Well, they were different roles. Owen, as chief revenue officer, was mostly focused on direct sales, which is what we have now, and business development. He was just focused in different areas. I wouldn't view this as really a replacement there, as other people have characterized it. Owen was doing that role, and he wanted to be a CEO, and I think Owen did great work here and I'm supporting him in doing that. With bringing in a COO, we just decided it was the right time for him to go and do that. Sheryl's role is going to be managing sales and business development but also a handful of other things.

So there's going to be all the different sales channels, direct and inside and online sales, and human resources, and marketing, communications and public policy...Sheryl will be in charge of all these different operations, and our consumer operations, the user operations group. It's a large organization for someone to oversee, and she's going to be primarily responsible for scaling that organization and scaling those operations.

What do you expect Facebook's employee head count to be at the end of 2008?
Zuckerberg: We have our projections that say we will probably get very near, maybe over a thousand, but it really just depends. We're hiring very aggressively just in terms of finding as many talented people as we can, and right now we're having a lot of success in doing that. So I think there's a good chance that we'll continue to grow very quickly this year, but I think over the long term in order to meet our goal just in terms of building this communication system that helps everyone in the world communicate more efficiently, that's going to require building a substantial business, and probably a lot of people all over the world, and we're going to need an organization, a set of operations that can do that. Sheryl's going to be really critical to helping us do that.

q&a Last week, business reviews site Yelp (famous for its wild parties and opinionated members) announced that it had raked in $15 million in Series D venture funding--and that the San Francisco-based company would be opening a new office in New York. I caught up with Yelp co-founder and CEO Jeremy Stoppelman over the weekend to talk about a few numbers other than the five-star rating.

Yelp New York, in Manhattan's West Village, opens Monday. But according to Stoppelman, they won't be celebrating with one of the bashes that made his site a bit notorious.

You guys just raised $15 million. What was the first thing you did when you closed the round?
Jeremy Stoppelman: (Laughs.) I think it was in the afternoon, so I checked my e-mail. We haven't really done any celebration or anything like that.

But you're Yelp! Didn't you at least do a happy hour?
Stoppelman: Well, we have our events going on. Almost every week there's an event in some city. So I guess the day after we closed we met with some of the investors and had some drinks, but really it's been a low-key type of thing. We've had greater festivities in the past. I think a greater part of it is just like, for us, it's not as much of a milestone. It's obviously a great thing because we need the money so that we can grow the company at the maximum rate possible, but we're past a lot of the more "scary" stages where it really is like a, "Wow, we made it!" Things have been going really well. We've got a lot of traction. The brand is growing stronger and stronger. So this is just like a continuance.

So why did you choose to open an office in New York? Is it for proximity to the ad industry?
Stoppelman: There was the connection to the ad industry; and ad buyers, there are a lot of them there, and then there are all the media industries. And then it's simply that New York is one of the linchpin cities or key cities in the U.S., and so we feel like it's going to be our biggest market or one of our biggest markets, and that we should be there physically as well.

Is it your second biggest market after San Francisco?
Stoppelman: No, it's like San Francisco Bay Area, then L.A., and then New York.

Did you consider opening the office in any other cities?
Stoppelman: (New York) seemed like the logical choice, you know, covering each coast.

How many people are you going to have in that office?
Stoppelman: Initially it's just a handful, under 10 people, but then towards the end of the year we'll be adding a lot of sales folks.

What's your projection for the number of Yelp employees by the end of '08?
Stoppelman: I don't really know. I don't have a number for you.

What're you at right now?
Stoppelman: We're at a hundred-something, a hundred and ten.

I know that in San Francisco "the Yelper" is almost a cultural figure now, and it's not always a good image. Are you ever feeling like you're doing damage control?
Stoppelman: We hear from businesses daily. People are writing reviews, business owners are watching them, (and) sometimes they feel like it's unfair and so they let us know, in which case we take a look at that review and see if it meets our guidelines. There's no damage control, there's always a dialogue around, you know, conversation that's happening on our site. There's nothing outside of that that we really actively do.

The other key point is just to say that 85 percent of businesses on Yelp have a three-star rating or above. And so it's easy to take a single comment personally or get really bummed out about it, and we tend to remember those most vividly. The reality is, the vast majority of comments are neutral to positive.

Where do you see Yelp in five years?
Stoppelman: I guess the first step is expansion in the U.S., geographic expansion, so seeing Yelp to expand to pretty much every major city in the U.S. is the next logical step.

Do you have international expansion plans?
Stoppelman: Yeah. Of course we'll get to international. I think there's a timing question of when does that hit, when does that happen, but certainly the formula continues to work all across the U.S. so you would think that this site would be just as well-received in a lot of other countries as well. There's just a whole lot of engineering work that goes into preparing the site for international (editions) because it would need to be able to handle multi-language, et cetera, et cetera.

Will that $15 million go in part toward server and other hardware costs? Are those going up?
Stoppelman: It's not changing that dramatically. Our site is fairly low-data-intensive compared to some of the other stuff out there. We're not pushing a ton of video or anything like that. It's actually pretty manageable, cost-wise, from a technology perspective.

MIAMI--Joseph Smarr, chief systems architect at Plaxo, has become somewhat of an icon of social media's future. An ardent supporter of open standards, Smarr is arguably one of the biggest proponents of Google's OpenSocial who can't officially claim to be a Googler. So it's fitting that Smarr has played a prominent role at the Future of Web Apps conference; CNET News.com had a chance to catch up with him on Thursday and find out some more about what "open" really means and what's next at Plaxo.

Plaxo was the first major social site to implement Google's OpenSocial. How has that been going?
Smarr: OpenSocial itself is still kind of a work in progress... (Critics) said OpenSocial was announced and then, "There's nothing there, what happened?" But I think it's important to remember that the timing had more to do with the fact that they (Google) saw all these companies saying, "Oh, we need our own platform" and there was all this fragmentation. That message of saying, "Wait a minute, guys, you don't all have to do your own thing, why don't we get together and do something together?" You sort of had to say that soon enough that it wasn't too late.

When you talk to developers, what are the most frequent questions you get about OpenSocial?
Smarr: I think a lot of them are very interested in the sort of viral aspect of it because a lot of developers are doing this stuff because they really want to get in front of a lot of eyeballs...Facebook imposes all these limitations about how many invitations you can send out, who you can invite, who can see the stuff. They're obviously doing that to prevent abusive use of the stuff, but it also potentially curtails legitimate use of it as well.

For example, a site like LinkedIn or Plaxo, which caters in general to a more professional demographic, less kids, that sort of thing, there might be less of everyone wanting to throw sheep at each other and that kind of thing. You might be able to give people a little more rope to broadcast things, to show each other. I think everyone hopes through OpenSocial that they can encourage the right kind of sharing.

So would you let people throw sheep at each other on Plaxo?
Smarr: It's unclear. But we do want Plaxo to be genuinely useful and about staying in touch between real people. I think there's lots of things we could've done.

How has Plaxo evolved since you've been there?
Smarr: Well, I was their first employee. I've been there six years. When I joined, we were still being incubated out of Sequoia (Capital)'s offices while they were trying to close the first round of funding...it's been a fascinating ride.

So what's the transition been like from focusing on straight-up contact management to growing and evolving as the Web has become more social?
Smarr: The world really changed around us. If you think back to 2002, when we conceived of and launched Plaxo, there was no social networking, there was no Friendster, there was no Flickr. This notion of living your life online didn't really exist. So I think in a way the business plan was oddly prescient. It was like, there needs to be this software that lives in a cloud that helps you stay in touch with people even though you're all changing jobs and using different tools. It wasn't called social networking, but it was (the same) pinpoint.

Joseph Smarr, Plaxo chief platform architect

(Credit: Plaxo)

Facebook's obviously having some issues these days with the "app spam" controversy. That's sort of parallel to what Plaxo had some problems with early on. Would you say that they could learn a lesson from what you guys experienced?
Smarr: I wouldn't say that that's the case. I think the high-level lesson is there's always this tension in start-ups between making everything very one-at-a-time opt-in but then having a hard time to actually get growth going, and trying to get things accelerated and do the right thing for your users but in a way that actually helps things take off. We've certainly learned over time about when it's okay to go a little faster and when you have to sort of pull back.

Do you think that people would have the same "acquaintance spam" problems with Plaxo if it had emerged now rather than circa 2003?
Smarr: The stuff that has happened since is so much more egregious than anything we ever did. We were one of these victims of being one of the first people to do it right, and people weren't used to it. So many of the social networks now will like, pull in your address book and just e-mail everybody without telling you, and use these very misleading tactics, and we never were trying to be shifty. I sort of marvel at what's gone on since then...how many e-mail notifications have you gotten from Facebook or Twitter? If you actually look at the volume, just because of how many people use these things, it's just huge amounts of e-mail.

Bacn!
Smarr: Exactly, right, bacn. And that's what we think is one of the real opportunities with the stuff we're doing now with trying to make an open social Web where everyone can communicate. Why does everyone ask me to confirm that I'm your friend as though I've never used any other site in my life? It's only because they don't talk to each other, the users aren't empowered to take the connections they made in one place and use them in another place.

We've got all these initiatives and coalitions and standards that are starting to emerge. There's OpenID, DataPortability, OpenSocial, and the like. You're getting all these different standards. Are they going to run into compatibility problems?
Smarr: I think the good news there is that because most of these are these community-driven efforts, there are all these people who are talking to each other all the time. All these people who started OpenID and OAuth and OpenSocial and DataPortability, they all started for different reasons, and yet they're all converging into this shared vision of a user-centric online identity kind of thing, and that's one of the proof points in my mind why this is really the right way to go, why we can tell it's going to win. The pieces just fit together, not because they were designed to, but because they all sort of have got the same vision...(it's) just like a perfect storm. They're all happening at the same time, and they're all filling in the right pieces. It's really cool.

How often are you faced with privacy concerns? Silicon Valley might be thrilled about having a single identity online, but some people might find that a bit daunting, frightening even.
Smarr: Privacy is at the center of everything we talk about. It's not just about people seeing stuff you didn't want them to see, it's also about maintaining the right level of professionalism and signal-to-noise ratio. So it's kind of like, people that I'm doing technical stuff with here and then they're putting up photos of their kids. It's not that they don't mind me seeing a picture of their kids, but that's not the relationship I have with them.

But if people have to curate their online identities like that, couldn't that lead to more fragmentation because people are seeing different faces of each other?
Smarr: The problem is, right now, you can't have it either way. Right now it's fragmented whether you want it to be or not. A lot of these technologies are going to let you sort of consolidate your online identity. Now it's either public or it's private, but this is going to allow you to share different things with different people. I think it's going to work really well. It's certainly something users are going to have to learn how to deal with, but users have to learn how to deal with a lot of stuff online. But it's fundamentally what users want.

Has there been any fallout over the whole controversy that took over blog chatter earlier this year when Robert Scoble was testing a Plaxo script on Facebook and got his Facebook account banned?
Smarr: The main takeaway from that was that as much as people want control over their data and the ability to make it portable, there still are some legitimate debates to be had about, say, if I'm sharing info with you in one context. How much should I be in the loop when you take it into another context? We thought it was a more cut-and-dry issue. I think ultimately you still want to be able to take people you've met in one place and put them in another place, so I don't think there's anything too crazy going on there, and we're trying to do the same thing. But it's still interesting how that all works. In the physical world, if you give me your business card, you wouldn't tell me "Oh, you can put it in Outlook, but don't you dare put it in Lotus Notes."

The meta-goal of a lot of what we were doing was to raise awareness and get people talking about these sorts of issues. That, I'd say, was a resounding success.

Wait, so did you know that Scoble would get banned from Facebook?
Smarr: No, that didn't play out at all the way we had originally intended. Scoble was being an early alpha tester of this feature since he's got 5,000 friends on Facebook and that's sort of a good "stress tester."

Yup, and everyone knows he's got 5,000 friends.
Smarr: And he's obviously been very much a vocal supporter of the kind of stuff we're working on. But then it triggered some rate limit on Facebook and got his account shut down, and then he blogged about it...when we woke up (the next day) we were kind of in damage control mode all day. I think if we'd gotten a chance to tell the story the way we wanted to, people would've seen that there's sort of less than meets the eye here, that this is a useful and genuinely good and not privacy-scary sort of thing. But we certainly did intend it to be a conversation starter, but we were also actually trying to build a useful feature for our users. It's one of our most-requested features.

Speaking of people with a lot of contacts, there's been a lot of press about how Bill Gates has stopped using Facebook and now he's signed on to LinkedIn. Does he use Plaxo?
Smarr: I actually don't know. We don't spy on our users. It's not like Facebook where anybody can access anybody's user records. We do have, I think, a lot of prominent people who use Plaxo, because we get anonymous statistical samples within Plaxo (about job title). "CEO" and "president" and "executive" and that kind of thing are at the top. So you might think of contact management as something that people at high levels would delegate to admins or something like that, but it's clearly like, being successful has a lot to do with really staying in touch and knowing people, right, so it's something that these people all sort of do themselves.

So how could Bill Gates use it?
Smarr: Bill Gates is such a special example it's hard to know exactly, but I think he, just like anybody else, meets all these people and wants to see what they're doing, it's a really hard problem to stay in touch with all of the online content in particular that people are doing. In particular, if he had friends or colleagues or family he wanted to stay in touch with, I'm sure even he has aggregation problems. People are putting up photos on Flickr or Picasa or Microsoft or whatever it is, and just being able to say, you know, "Ray Ozzie posted vacation photos" would be really useful.

Recently there were some rumors that you guys had gotten bought. Where did that all come from?
Smarr: It's Silicon Valley, I don't know, it's a very gossipy town and especially whenever they smell money in the water, everybody kind of goes crazy.

Invent a theoretical company who would be your dream buyer.
Smarr: I don't think we need to be bought by anybody. I take it as a testament to the fact that what we're doing is useful and relevant that all these people were talking about, "oh, these guys should be buying Plaxo." Nobody was saying "That's stupid, they're not doing anything useful." It's kind of like reading your own obituary in a way.

What are we going to see coming up? Is the focus now going to be on getting OpenSocial in there, getting the developers on board?
Smarr: That's one piece of it. Actually, the DataPortability piece is really what I think the future is for us. Pulse is doing great in its own right, but we really see the evolution of that. We really think Plaxo's going to become a kind of dashboard for the social Web where you sort of help manage and maintain relationships across all these different sites, see all the activity there. There's just so much to do there. It's so fragmented right now and most users aren't just using any of it right now because it's so hard to have to create your profile and do everything from scratch and stay in touch and all that. The fact that we can live inside the tools that you use every day, on your phone, on Outlook, all these Web sites, means that I think we can take all these people who are using that daily pattern and show them this whole world of content. That's got such legs...It feels like we're on the cusp of a whole new era of the Web.

If you had to give one piece of advice to Mark Zuckerberg, what would it be?
Smarr: Open is good for business. I don't think Facebook has anything to fear from being closed down to user control of data. I think they get that. A lot of them really do believe in openness and transparency, they just have to get there in stages. Ultimately I think they'll be a great beneficiary of this.

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?

Digg founder Kevin Rose.

(Credit: Digg)

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.

q&a MIAMI--Kevin Rose, founder of social-news site Digg, has a lot to say about the evolution of the social Web. So much, in fact, that when I caught up with him at a sidewalk cafe in Miami's South Beach neighborhood while in town for the Future of Web Apps conference, I had to split the interview transcript into two parts.

Here's part 1, in which Rose talks about open standards, dodges those pesky acquisition rumors, waxes philosophical on the site's active community, and declines suggestions from the restaurant staff to check out the cocktail menu, because lunchtime is apparently the new happy hour.

So we're here in Miami for the Future of Web Apps conference, and tomorrow (Friday), you're on a panel called "How to Build a Web App in 40 Minutes"?
Kevin Rose: 45 minutes.

How's that going to go?
Rose: Oh, it's going to be awesome. It's probably going to be the best panel of all time. I've got so many ideas for Web apps. I'm going to freaking rock this panel. I've got a few really good ideas that I'm going to pitch out to the crowd. It's going to be fun.

So one of the big topics at FOWA will be this "open standards" stuff. Google's OpenSocial, OpenID, DataPortability, and the like. How's Digg involved in that?
Rose: Well, we do some stuff with OpenSocial. We're working on some stuff, but I don't think anything's been announced...We just joined the DataPortability group, so we're working with them to really free up a lot of the content we have on our site. That's something that you'll see us rolling out through a whole series of different moves to really open up our data to everyone.

What's the first thing we'll likely see?
Rose: Well, I've talked about OpenID in the past, and it's been a while, but you'll see it eventually. The problem is, I always get in trouble when I talk about this stuff because we have so much stuff going on in development that I mention it, it goes out, the community gets really excited, and then we don't do anything about it for six months, and people get really pissed off. So I'm kind of hesitant to say what's going to be coming first. You'll see us doing a bunch of different stuff.

You mentioned Digg's community, which tends to be very tech-savvy, and how anytime somebody says something forward-thinking, it gets really excited. Do they demand a lot of you, keep you on your toes, that sort of thing?
Rose: It really depends on what they want. I don't think they've ever really been demanding about us opening up our data like that. That's something that our own internal developers are really into, and the community will get really excited when we mention it.

I think that you have some people who are very passionate about our feature set and where we're going, productwise. A good example is when, before we rolled out Images (a section where members can "Digg" images as opposed to links) there were several stories on the front page of Digg saying, "give us a dedicated images section," and they all had thousands of people Digging them.

Our comments system is going to have a major revamp in the next couple of months, and there have been a lot of stories about that, like, "Comments are broken; here's what you can improve."

Rose (right) with Digg CEO Jay Adelson on a live-streamed 'town hall' with users earlier this week.

(Credit: Ustream.tv)

It's been a really fun learning experience. I wouldn't have said that six months ago. Six months ago, I wouldn't have called it fun, because I really just couldn't figure out how to best work with the community, and there were a lot of stories that were coming like, "Your comments suck--fix them," and it was always like, "fix them, fix them, fix them," and that's all we were getting back from the community.

For us internally, we were all having debates about which feature set to fix and what we perceived as the most broken features and functionality, and where to go from there, and we finally just sat down and said, "Well, let's ask the community," and go back to them, and provide some structure around what we were asking...once we did that, rather than the community saying, "You suck, Digg--fix your comments," it was a lot more structured. We got a lot more valuable input from the community.

Do you ever feel that there's any kind of tension between growing and turning Digg into something legitimately mass-market, when you've obviously got this core community that's very passionate about certain issues? As you expand, will there be any kind of conflict?
Rose: You know, it's been a really interesting evolution of the site over the last few years. Outside of just adding categories to the site so that people can talk about their favorite stories and submit their favorite stories, it's really the community that's been evolving.

Politics, obviously because of what's been going on, is just a huge and amazingly active section on Digg. For us, it's really about providing the community with the tools to customize the experience so they can get that same version of Digg that they really enjoy.

So are we going to see recommendations and personalized news?
Rose: Absolutely. That's something that is very close to being rolled out. Again, I can't really attach a date to it, but I play with it every day on our own staging servers. We've written a recommendation engine that essentially looks at every story that you've "Dugg" and compares them to everyone else's stories in real time, and we'll make recommendations to you based on what those other people whom you're always agreeing with are Digging.

So it's pretty crazy, and it was quite an engineering feat to pull off. The fact that you can Digg something, and that would be refactored into everyone else's Diggs in just a second or two is really impressive and took us a while, but it's working.

You'll see that applied to our Upcoming stories section initially. Because I think when you think about Digg, you think about the front page. But one of the things that I think sucks is the fact that there are 10,000 submissions in the Upcoming section every day, and not only is it impossible to sort through that many and find the good content, but it's boring, and who wants to spend their time doing that? You know, looking through spam and things like that.

Recommendations will go a long way to suggest to you content very early on that will eventually become popular, that you may find interesting.

What do you think of all these new competitors in the social-news sector? Mixx just got funded, and a few other companies have created in-house news-voting systems.
Rose: None of them really keep me up at night. The thing that most worries me is the ones I haven't seen yet, the ones that are doing something different and innovating in our space. The same old "click a button, and the number goes up"--that's been done time and time again. We've seen hundreds of Digg clones that fashion themselves in that manner.

So what about Yahoo Buzz?
Rose: I've "Buzzed" a few stories. I think that a lot of people like the idea of potentially getting their articles in front of a lot of people on Yahoo's Web site, and that's a huge carrot to hold in front of people. But functionality-wise, it's really lacking on the community side...they've really taken the safe approach, with no comments and really no interaction there. Somebody told me last night that (Yahoo) gave it 90 days to sink or swim. I don't know.

Speaking of big companies, I'm not even going to bother asking if you're getting bought, because I know exactly what you'll say, but how many acquisition offers have you turned down over the past couple of years?
Rose: We've had various companies approach us all the time to talk about deeper partnerships, but I don't know, that's something we never really comment on. The thing is that at Digg, if you were to talk to the other employees and look at what we're doing, we're very much focused on being independent and creating a quality product.

Does it factor in at all how the community would react if you got bought? They've gotten a reputation for being a pretty independent-minded bunch, too.
Rose: Well, you don't have to worry about that stuff if you're just focused on creating the site and not worrying about acquisitions. For us, we have a fully funded business model, and we have a great ad relationship with Microsoft, and it feels really good to be able to react quickly and not have to worry about some of the problems that come with working with a larger company.

I've had several friends that have been acquired by the Yahoos and Googles of the world, and while there is some upside in certain things, for the most part, it slows things down. You can't get a product out the door fast enough.

Continue reading at part 2 of the Kevin Rose interview.