WTF Digg?

I don't get it! Digg got $40 million in capital investments to start. I understand Digg is a big deal and revolutionized the way social media and news co-habitate. But 40 MILLION DOLLARS?! Really?

This is my rough semi-educated guess on start up costs:
Labor (quit your day job and work on digg development): $450,000
Administrative Costs (Computers, workspace, etc): $100,000
Server Space (even though they could have remotely hosted, lets say they had dedicated in house servers, including anticipated bandwidth): $75,000
Advertising: $20,000 (its mostly online, sure maybe Conde Nast, WIRED)
Miscellaneous Costs: $150,000 (paper, I dunno)

Total: $795,000

I must be missing so much, especially since I could start a Digg clone for the cost of my own personal time and hosting, which would cost under $5,000... http://mashable.com/2008/03/28/create-digg-clone/

Just saying...