Can Digg ever become the powerhouse it so badly wanted to be? It's a natural question amid the departure of five-year CEO Jay Adelson, the latest in a line of painful goodbyes for the social news site.

Digg needs to sell itself. Kevin Rose's headline-voting site is drowning; the more popular it gets, the more red ink it generates. But who needs a bunch of news stories rated? Here's an idea: Amazon.com.

Digg, the raucous online news-rating site, has laid off 8 people from its 75-person workforce. CEO Jay Adelson writes that the company will "aggressively focus on reaching profitability within the year." There's no way.

Perhaps Digg really is the future of the news business. The headline-discussion site, once an icon of the Web 2.0 movement, is losing millions of dollars a year.

Will the CEO of Digg make up his mind on who he wants to be? I once asked him what car he drove, and he took pains to let me know he had a suburban-dad Honda minivan and an environmentalist-standard-issue Toyota Prius. Just a regular guy! But he later complained when I suggested he wasn't a "rock star." I'm thinking Adelson — who commutes from his actual suburban-dad life in upstate New York to his CEO gig in san Francisco — is working on sexing up his image. A tipster says Adelson has just gotten a $109,000 all-electric, obsidian black Tesla Roadster. Which, if you think about it, is exactly the racy kind of vehicle most suburban dads his age might want to buy, if only they could afford it.

Burn, baby, burn! That's the coded message in Digg CEO Jay Adelson's blog post about a "major expansion effort." The website, whose users rate and discuss news headlines, is hiring for 19 open positions, with more to come, as Digg expands internationally. Only at the end does Adelson mention how he's making this happen: $28.7 million in venture-capital financing. Coming after failed acquisition talks with Google, the financing round makes it clear that Digg is now planning to get bigger rather than sell out. It's a strange thing to celebrate.The obvious goal of the blog post is to advertise Digg's available jobs to prospective engineers. But in so doing, Adelson's alerting everyone to Digg's ever-expanding payroll expense — without talking up where the money is coming from. Digg has a sweetheart advertising deal with Microsoft, which sells ads for the site — but it hasn't found a revenue model of its own. And Digg has a management problem which will only get more obvious as the company swells. Adelson, who commutes to Digg's San Francisco headquarters from his home in upstate New York, has admitted that he's not as committed to the company as he could be, having been burnt at a previous startup, Equinix. Founder Kevin Rose, who still commands considerable respect among Digg's contentious users, has made it plain he's not interested in running a big company and taking it public. It's hard to picture Rose and Adelson staying if Digg is sincere about getting big.

Austin-based interactive ad agency Tocquigny embarrassed itself with a video meant to show prospective interns how fun it is to work at the company over the summer. Instead of showing how quirky and Internet-savvy Tocquigny was, it proved to be a turnoff — and a ripoff. Besides not copying someone else's work, what could Tocquigny have done differently? Using five examples the agency should have followed, we'll explain how to do a self-promotional corporate video right:Rule No. 1: Convince the video's participants that the end product will be less embarrassing if they don't worry about being embarrassed while they make it. Get your people to either commit themselves fully to the project, or stay out of the way. Vimeo's companywide lip synch of Harvey Danger's "Flagpole Sitta" wouldn't work nearly so well if the girl listening to her iPod at the beginning didn't keep such a straight face. Know what else doesn't hurt? Actually memorizing the lyrics.

A tipster tells us Google has backed out of talks to buy Digg, the popular news-discussion site fronted by Kevin Rose, the Web-video personality and San Francisco Casanova. There have been hints all week that Google has been cooling on Digg. Marissa Mayer, Google's reigning princess of pageviews, had once fancied Digg as a means of improving Google News, one of her Web properties. Last month, at her behest, acquisition talks were getting serious. But then Mayer brashly (and perhaps foolishly) announced Wednesday that Google News generated $100 million a year in revenues for Google. Translation: Who needs Digg?Shortly thereafter, reearsh firm Hitwise ran numbers which showed that Digg would be inconsequential for Google's traffic, only the 13th largest Web property, well behind Google News. Coincidence? Perhaps, but they can't have been helpful for Digg's negotiations. One other sign that the deal has been going nowhere: Digg has been interviewing for a head of PR. That's a position they wouldn't fill if they were close to a sale. That said, we hear Digg board member Brett Bullington, who helped sell JotSpot to Google in 2006, has been pushing to keep negotiations alive. So are things on? Are they off? Never say never in deals. But even Digg CEO Jay Adelson acknowledged this week, at a meetup with Digg users in Chicago, that his company has been too prone to leaks during negotiations. Could he be getting a taste of the same from the Google side? That's a theory I dig.

At a Chicago meetup yesterday, Digg CEO Jay Adelson would not comment on recent rumors that Google has renewed talks to buy the site. “There is no word,” Adelson said. “We commented on one of these rumors before and it got us in trouble. There is nothing to say.” Digg founder Kevin Rose wasn't so shy, joking with the audience: “We’re buying Google.” Adelson did, however, tell the audience that following smaller social-news rivals Reddit and Mixx, Digg will soon allow users to create their own sites using Digg's technology. Adelson said the new feature would be out in six months. The Windy Citizen reports:

Google cofounder Larry Page and Digg CEO Jay Adelson were all smiles at Allen & Co.'s Sun Valley retreat. Was it because they had just wrapped up a long-rumored deal for Google to buy Digg, with the price in the neighborhood of $200 million? TechCrunch says talks are on again. (Photo by Reuters)

A recent photo of sunglass-sporting Digg CEO Jay Adelson with slightly more nerdy Google cofounder Larry Page sent reader theodp on an '80s nostalgia trip. (Photo by Reuters, photoillustration by theodp)

This year's Sun Valley retreat, put on as usual by investment bank Allen & Co, will be Digg CEO Jay Adelson's second. But it marks Adelson's third or fourth trip around the block trying to sell Digg — with Allen & Co's help, naturally. Most of Digg's prior suitors — IAC, News Corp. and Al Gore's Current TV among them — are regulars at the Idaho resort. Glancing at Dealbook's photo of Adelson and Google cofounder Larry Page, we wonder: After months of lobbying from Google VP Marissa Mayer, has Google's top management finally decided to buy Digg and relieve the New York-based Adelson of his wearisome bicoastal commute? Adelson and Page's all-smiles body language in this photo strongly suggest it's so. (Photo by Reuters)

News.com reporter Caroline McCarthy's informants could have sworn they saw Digg CEO Jay Adelson at a party for RealNetworks last night. But Adelson, pictured left, was in San Francisco. So who was it? One possibility: A model who appears in the Clarins Men advertising campaign, right. Jay Adelson, mistaken for a male model? The world is going mad.

Saul Hansell quoted Digg CEO Jay Adelson defending the Associated Press (of which Hansell's publication the Times is a member). TechCrunch's Michael Arrington freaked out, natch. Adelson then attempted to further explain his complicated position, trying to be diplomatic. Yawn. As we've said before, and will say again, exercise your fair use rights under the law and shut up, because giving the AP attention just feeds its argument and therefore reinforces its position. Moving on:

Google's cupcake princess, Marissa Mayer, and Kevin Rose, the playboy of the Webhead world, would make an awfully cute couple. Not romantically — the two are dating other people at the moment. But we hear Mayer is pushing hard for an acquisition of Rose's Digg, for a price below $200 million. Kara Swisher hinted a few days ago that the social news site, on which users "digg" or "bury" their favorite news headlines, might be on Google's shopping list. Mayer's goal: to use what Digg has learned to fix Google News which, while popular, doesn't make Google any money. (Digg CEO Jay Adelson would not comment on the sale rumor, but did disclose that he was having a "delicious" In 'N' Out burger for lunch.)

HEARST TOWER, NEW YORK — Far from the sweaty, screaming fans that attended Digg's Brooklyn meetup Wednesday night, the suits of the Alley and Valley gathered last night on the top-most floor of the Hearst Tower for another Founders Club party to celebrate each others' transcendent splendor. All night, giant screens at either end of the party played clips from Citizen Kane, the barely fictionalized biopic based on the life of Hearst Corp.'s own founder, William Randolph Hearst. There wasn't a Hearst in the crowd, but there were those who aspire to be him. Blog moguls like PaidContent's Rafat Ali, Gawker Media's Nick Denton and AlleyCorp's Henry Blodget mingled. New Gifts.com CEO Jason Rapp attended, as did Digg cofounders Kevin Rose and Jay Adelson. Facebook CEO Mark Zuckerberg's mentor, Valley bad boy Sean Parker, was rumored to be in the crowd as well. Jimmy Wales, cofounder of the world's most comprehensive list of William Randolph Heart's angry responses to Citizen Kane, attended with Andrea Weckerle on his arm. Photos below.

The line to get into Digg's meetup and live filming of Diggnation last night in Brooklyn went around the block. Inside, the joint was packed with dudes drinking beer, waving around iPhones, and wearing T-shirts. There were maybe like 10 or 15 women. Just as rare: Microsoft Zune users. Despite Microsoft's sponsorship, when Revision3 CEO Jim Louderback tried to give away Zune T-shirts, the crowd only booed. Julia Allison's entourage, Kevin Rose, and more in our photo gallery.

Web 2.0 was hot last night. And I mean the kind of heat determined not by Technorati rank, but by the thermometer. Despite the stifling weather, San Francisco's Web stars turned out for a party Sarah Lacy threw for her new book, Once You're Lucky, Twice You're Good at Otis off Union Square. The hole-in-the-wall, two-story bar couldn't handle the crowd, which spilled out on Maiden Lane. Slide CEO Max Levchin, the star of the book, stopped by with fiancé Nellie Minkova to congratulate Lacy, and then immediately left. Runner-up Jay Adelson, whom Levchin beat on page count, stayed longer, as did Twitter's Ev Williams, who came with his wife, Sara Morishige. Also in the crowd: August Capital VC David Hornik, who didn't even rate a mention in the index, despite inviting Lacy to his exclusive Lobby conference. A gallery of photos, after the jump:

Digg cofounder Jay Adelson is now asked by the likes of Kara Swisher how he'd fix big media companies, as in this clip. But there was a time when he barely knew what to do with his own Internet startup, Equinix. That tale and more covers 54 out of 294 pages in Once You're Lucky, Twice You're Good, Sarah Lacy's soon-to-be-released book about Web 2.0. The first page of the book's index, one of many to come:

IAC's Connected Ventures may have done it first, and AOLers in France may have done it better, but give Digg's companywide lip-synching video credit. Skip ahead to check out Jay Adelson at 2:02. Rewind from there to see Kevin Rose Digg underlings jumping up on a conference-room table. (Founder Kevin Rose doesn't actually appear until the very end, where he declares the group "crazy" and leaves. For his future dignity, a wise move. No one has, as yet, leaked footage of Barry Diller or Randy Falco wearing shades and rapping.) Full clip is below: