Feeds

Digg, deep in the hole, sells self for $500K

All that's left is to shovel in the dirt and plant the daisy

Security for virtualized datacentres

Social news- and link-sharing site Digg has sold itself to New York technology incubator Betaworks for the paltry sum of $500,000.

The Wall Street Journal reports that Betaworks does not plan to retain any of Digg's current employees.

"Over the last few months, we've considered many options of where Digg could go," writes Digg CEO Matt Williams, "and frankly many of them could not live up to the reason Digg was invented in the first place – to discover the best stuff on the web. We wanted to find a way to take Digg back to its startup roots."

To put the jaw-dropping sale price into perspective, $500,000 is the bare minimum needed to open a McDonald's franchise. It's less than the average price of a one-bedroom starter home in San Francisco, where Digg is currently headquartered. It's what Facebook's Mark Zuckerberg earns in annual salary – but that's not including bonuses and equity grants.

It's also just 0.2 per cent of the $300m Digg was reportedly shopping itself for in 2007.

But those were headier days. Digg was once considered one of the most promising social media sites on the web, but its popularity waned with the rise of such competitors as Facebook, Reddit, and Twitter.

It had come close to being acquired several times over the years, and it made no secret that it was actively seeking a buyer – but it never found one. In 2008, Google reportedly walked away from a deal that would have valued Digg at $200m.

Along the way, the company has hemorrhaged money, and cost-cutting measures haven't been enough. In October 2010 it cut a third of its staff, leaving it with just 47 employees. By then it had already lost both cofounders.

In May of this year, 15 members of Digg's engineering team jumped ship to join SocialCode, a social media advertising agency owned by the Washington Post, leaving Digg with less than half its former staff.

This week, TechCrunch reported that Digg had raised a new round of funding from one of its existing investors. If it hadn't, sources speculated that it might have run out of cash in six months.

Following Thursday's merger, Betaworks plans to merge Digg with News.me, a Betaworks-funded startup that markets an app for iOS devices that aggregates news links from social media websites.

"We are turning Digg back into a startup," writes Betaworks founder John Borthwick, who will be taking over as Digg CEO. "Low budget, small team, fast cycles."

We'll see if it works this time. ®

Security and trust: The backbone of doing business over the internet

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Why Oracle CEO Larry Ellison had to go ... Except he hasn't
Silicon Valley's veteran seadog in piratical Putin impression
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.