Rick Wilking/Reuters and Ethan Miller/Getty Images Jay Adelson, at left, former chief executive of Digg, with Larry Page, co-founder of Google. At right, Digg’s founder, Kevin Rose, arrives at a Las Vegas movie screening with the actor Ashton Kutcher.Jay Adelson, chief executive of Digg, the user-driven social news Web site, announced on Monday that he would step down as head of the company. Kevin Rose, Digg’s original founder, will be taking over as the new chief executive.
The change signals a dramatic shift in management style for Digg. Mr. Adelson was a behind-the-scenes, collected, business-savvy manager. In comparison, Mr. Rose, the public face of the company, is a gregarious socialite who often appears at parties with major celebrities and on mainstream television shows.
People with knowledge of the situation, who asked to remain anonymous because of its sensitivity, said Mr. Adelson’s departure was partly due to frustration among the venture capitalists who have invested $40 million in the company but have yet to see a return.
Digg was one of the earliest social media Web sites, growing quickly in the early days of Web 2.0 and appearing on the cover of major business magazines. Yet recently, other social services, including Twitter and Facebook, have displaced Digg as tools for Web users to share links to news and information.
As a result, Digg’s traffic has dropped; according to an analysis from Compete, Digg has lost nearly 5 million unique users since September of last year.
Mr. Adelson wrote in a company blog post that his decision to move on was part of an “entrepreneurial calling,” and that he hoped to “incubate some new business ideas over the next twelve months.”
However, one of the people familiar with the situation said, “Either Kevin or Jay had to go, and Kevin is the face of the company, so it fell on Jay to leave.” The person said Digg’s venture backers, which include Greylock Partners and Omidyar Network, knew the company had been slow to innovate recently, and although Digg executives have tried to sell the company several times in the past few years — even coming close to a deal with Google — each possible acquisition has fallen through because of Digg’s overblown financial requests.
In a written response to the transition, Mr. Rose thanked Mr. Adelson “for the last five years of amazing work” and called him a “great friend and mentor.” But he quickly moved on to discuss his new role: “While I’ll miss working with Jay day-to-day, I am excited to be taking on the role of Chairman and acting CEO, driving Digg forward on our promise to enable social curation of the world’s content and the conversation around it.”