I wonder where one can find some good data as to how well traffic actually converts, instead of just going by CPM. I know its better to worry about monetizing a site later, and getting users by giving them something that they want first, but not all startups can use this model.
Also, many sites, especially ones that spread virally (social networking, some dating, and basically anything that revolves around interaction with others instead of just "tools") there is an uphill battle to get the first decent size batch of users. I think linkedin is a good example of this. It took a while for them to get enough users to make it worthwhile for most professionals (those outside the valley) to want to join it.
Supposedly a website targeted to a certain demographic needs 800 million page views a MONTH to generate 50 million dollars a YEAR. That means if you can get a million active users you are making maybe 6 million a year. I wonder if digg is anywhere near that?
Digg provides a lot of value to people who don't bother signing up, so its 1 million signups figure doesn't actually indicate that they only have 1 million users.
Also, many sites, especially ones that spread virally (social networking, some dating, and basically anything that revolves around interaction with others instead of just "tools") there is an uphill battle to get the first decent size batch of users. I think linkedin is a good example of this. It took a while for them to get enough users to make it worthwhile for most professionals (those outside the valley) to want to join it.