Feeds

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

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

Reducing security risks from open source software

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. ®

Eight steps to building an HP BladeSystem

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.