Social Web Hype Hits a Maxim With Digg’s Latest Round of Funding

Yesterday afternoon Digg announced that they had secured yet another round of funding. This new round is for $28.7 million. Two things come to everybody’s mind: what are they going to do with all that money and did Kevin and Jay take some cash as part of this round? Is the company prepared to release the latest cure for cancer? Probably not.

I’m giving Digg a hard time. I mean Facebook was able to raise almost half a billion after all their rounds of funding right? While the site attracts over 20 million monthly users domestically and even more worldwide, the site isn’t exactly at the early stage of their growth. Are they? The site is preparing to launch support for the Facebook Connect service and they’re hoping that this helps transform the service and attract a broader audience.

Perhaps the site will become the social voting site for absolutely everything, not just news. After four years of operations, a lack of profit, and many unsuccessful exit attempts it appears that the next best option was to go for funding. I have to give it to the Digg team, they have some serious cohones! While I love using the site to find the latest tech news, I’m just not sure that the service is transforming the world the way that $40 million in total funding should.

Perhaps this is all part of the Web 2.0 mindset though. Give a lot of money to people that are building services that help us organize the nearly infinite information on the web. Do you think this round is justifiable? What do you think they could possibly be using all this money for?