Digg takes $28.7 million in funding

SAN FRANCISCO (Reuters) - Digg Inc, the leading news sharing site, has taken a new round of $28.7 million in funding that will allow the company to expand internationally and help it weather tighter economic times for Web businesses.

Chairman Jay Adelson said his company received the Series C investment led by Highland Capital Partners to finance Digg’s international expansion and translation into other languages besides English. The round includes previous investors Greylock Partners, Omidyar Network and SVB Capital.

The company is a four-year-old site that lets users vote news stories up or down in an online ranking system that is part popularity contest and partly a means for the audience at large to act as editors and filter incoming news.

Digg said its global audience has doubled over the past year to 30 million monthly visitors. “Digg this” buttons now appear at the bottom of news stories on more than half of the top 25 ranked U.S. news sites, including The New York Times, Fox News, BBC, Sports Illustrated, and Reuters.

In addition to its international ambitions, the investment will be used to double the San Francisco-based company’s staff to 150 by the end of 2009 from around 70 employees currently and to move to a larger corporate headquarters in the city.

It has taken a total of $40 million in three rounds since the site was founded four years ago by Adelson, a dot-com era entrepreneur, and Kevin Rose, a former technology journalist who has emerged as a poster boy of the Web 2.0 phenomenon.

The new round of funding follows an effort by investment bank Allen & Co to shop the company over the past year among potential buyers, including big technology and media companies. Unconfirmed reports say the asking price for Digg was around $150 million.

Reporting by Eric Auchard; Editing by Andre Grenon