Who needs the tech IPO?

Commentary about business and finance.
July 31 2008 1:31 PM

Who Needs the Tech IPO?

Open source and Facebook have completely changed the economics of Web startups.

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Which is why the Digg deal's flameout was so telling. At first glance, it seemed like the ideal model for the new digital media. Kevin Rose started the firm in 2004 with a handful of cash; soon, he was on the cover of Business Week, and he barely had to spend a cent. But without a clear plan to monetize the buzz, Rose had no choice but to wait for a bigger company to buy him out. Now that Google's taken a pass, he'll have to wait a little longer, while rival social news sites like Yahoo Buzz are already challenging Digg for supremacy. Rose had no problem dealing with the cost of doing business. Staying cool until the money comes back … well, that's a different kind of animal.

Correction, Aug. 1, 2008: Sharon Wienbar's name was originally misspelled as "Weinbar." (Return  to the corrected sentence.)

Chris Thompson writes the Feeling Lucky blog, a feature on The Big Money, Slate's business site launching later this year.