Investors Digg Kevin Rose

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There's no question Rose, 30, has learned to generate industry buzz and that he is quickly becoming a serial entrepreneur of the new, user-driven Web. "Kevin has become a really savvy businessman in the last few years," absorbing lessons in product development, fund-raising, and public relations, says Adelson. "He's learned a lot about starting companies." Given Revision3's recent capital infusion, Rose's first two ventures are "fully funded to profitability," Adelson says—meaning they have enough money to eventually turn a profit without needing to raise more.

Pownce: In-Crowd Appeal

That leaves Pownce, which also looks to generate profit from ads as well as premium subscriptions. Available by invitation only for its test phase, the service is accessible through either a Web browser or desktop software built with technology from Adobe Systems (ADBE) that can speed performance. Sponsors can buy text ads that appear on users' profile and message pages. A version with no ads and support for large file transfers costs $20 a year.

While Pownce could struggle to find a mass market, it may appeal to the roughly 20% of Web users who are early adopters of new online media, says JupiterResearch media analyst Barry Parr. "This definitely feels like a product for that 20% and their friends," he says. "That's not necessarily a bad thing. You're talking about a pretty elite audience—they're the social backbone of the Internet."

So far, Rose is keeping a low profile with Pownce. He didn't respond to an interview request, and a spokeswoman says he isn't talking about the new venture. Adelson also declined to comment, other than to say he uses the site, and that Rose "doesn't work on it when he's at Digg."

That awareness level could change, though. Megatechtronium, the company behind Pownce, has begun talking to potential investors. Likewise, the public relations firm for both Digg and Revision3, Karbo/Fonkalsrud Communications, has started handling some Pownce work. Notably, invitations to join Pownce (free if you know someone in the network) have been showing up on eBay (EBAY) auctions with asking prices of up to $10.

An Increasingly Crowded Field

But the site clearly faces headwinds, from industry heavyweights such as News Corp.'s MySpace to the professional networking site LinkedIn and newer entrants like Twitter, which has soared in popularity by letting users broadcast text messages about what they're doing from moment to moment (see BusinessWeek.com, 4/2/07, "Twitter: All Trivia, All the Time ").

Pownce's launch also comes as Web companies wrestle with the knottier implications of user-generated content. When the audience supplies the reading matter, a site risks losing control of what's posted. Case in point: Digg in May sparked a user revolt after it removed links to articles containing a code to bypass the copy protection on high-definition DVDs (see BusinessWeek.com, 5/3/07, "Digg's Mob Rules"). Users then flooded Digg's site with even more links to the code, overwhelming Diggs attempts to remove them.

Then there's the relative obscurity of Pownce's other principals, including 24-year-old programmer Leah Culver and Digg designer Daniel Burka. While they have street credentials in San Francisco Web circles, they aren't known quantities when it comes to launching companies, according to investors.

Adelson says his compact with Rose allows each to try side projects to see if they stick. "One of the greatest things about our relationship is we're very free about letting each other experiment and try things," he says. "There are probably going to be many more."

Ricadela is a writer for BusinessWeek.com in Silicon Valley.