Once a social media darling of Silicon Valley, news-sharing tool Digg has sold out--and for a fraction of what it was once estimated to be worth.
Digg confirmed Thursday that it has been acquired by New York-based technology investment firm Betaworks for $500,000. That's quite the fall from the start-up's heydays. Back in 2006, BusinessWeek estimated Digg was worth $60 million.
The Wall Street Journal reports that the deal will give Betaworks the Digg brand, technology, and website. This news comes just months after The Washington Post reported that 15 of Digg’s employees (more than half of the total staff) were hired by digital media subsidiary Social Code. Digg’s remaining employees will not join Betaworks, The Journal says, while Digg’s CEO Matt Williams will join venture firm Andreessen-Horowitz as an entrepreneur-in-residence.
Digg broke onto the scene in 2004--before Facebook and Twitter--offering users a way to share information with friends and make connections. The company raised more than $45 million from investors like LinkedIn founder Reid Hoffman and Marc Andreessen.
For a while, the company seemed unstoppable. It had a well-known founder, Kevin Rose, generous funding, and 30 million monthly users as of 2008, according to ComScore. With rumored acquisition offers from companies such as Google, Digg held out.
"They were one of the first social media sites," Kristina Lerman, an assistant research professor at the University of Southern California who has studied Digg and other social news sharing sites, told The Journal. "They introduced social components like having friends and followers."
But after a series of unpopular re-designs and the introduction of competing social news sites like Reddit, Digg had less than 15 million monthly users by 2010. As of May, 2012, ComScore reported just 7 million monthly visitors.
According to The Journal, Betaworks, which launched a news sharing site News.me a little over a year ago, hopes to invigorate its user base by incorporating Digg’s users, technology, and design--what’s left of it anyway.