Betaworks buys social news site Digg, or what's left of it

Digg, one of the first social media sites, was bought on Thursday by development firm Betaworks for $500,000 – a fraction of its value in the late 2000s. Betaworks has a plan to "take Digg back to its startup roots."

Jeff Ward-Bailey
Tech development firm Betaworks bought social news site Digg on Thursday for $500,000. Here, Digg's announcement of the acquisition is shown on a laptop.

In its heyday, social news site Digg raised $45 million from Silicon Valley investors. On Thursday, it was bought by New York development firm Betaworks for $500,000. What happened?

The short answer is that Digg's fortunes have been waning for more than two years. The company got in on social media early – it was one of the first "social news" sites, allowing users to submit stories and links from around the Internet and letting other users vote these links up to prominence or down into obscurity. In 2008, the site had 30 million monthly visitors, but its fortunes began to fall in 2010 as other social media companies such as Facebook and Twitter rose. It also faced competition from Reddit, a similar social news site that began drawing more monthly visitors last December. Digg currently has about 7 million visitors a month.

The deal highlights how far Digg has fallen: in 2008 the company was reportedly working on a deal to sell itself to Google for $200 million, although it never went through. And the announcement of the Betaworks acquisition had just 162 "Diggs" nine hours after it was posted -- a few years ago, such a story probably would have gotten thousands by this point.

But for its half-million investment, Betaworks is still getting a well-known brand and a not-insignificant monthly audience. Betaworks plans to work Digg into its service, which creates personalized daily e-mail newsletters by collecting news articles that are being shared by a user's Facebook and Twitter contacts. The company says it wants to make Digg "back into a startup," with an emphasis on "low budget, small team, fast [update] cycles." And Matt Williams, Digg's Chief Executive, promised that Betaworks would soon unveil "a new cloud-based version" of the service.

The deal doesn't include any of Digg's employees -- the entire site will be managed by the 10-person team and John Borthwick, the founder of Betaworks, will become Digg's new CEO. There are fewer than 15 Digg employees remaining, anyway: the bulk of the engineering team was hired in May by Social Code, a subsidiary of the Washington Post. Joseph Walker and Spencer E. Ante at the Wall Street Journal report that Matt Williams has been hired by Andreessen Horowitz, a venture capital firm, as the entrepreneur-in-residence.

Are you, or were you, a Digg user? Do you think Betaworks can return the company to prominence? Share your thoughts in the comments section below.

For more tech news, follow us on Twitter @venturenaut.

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to