The social sharing site Digg has been sold to Betaworks for just $500,000. This comes two years after Digg boss Kevin Rose turned down a $200 million offer from the search engine giant Google. This is a sharp comedown for the site that was heralded as the beginning of sharing and social media when it was created in 2004.
The site allowed users to rate – or ‘Digg’ – links to aggregated news articles, a trailblazer of the way social media like Facebook and Twitter let you like or re-tweet posts from others on the site.
At one time, the aggregator was one of the biggest hits on the Internet, attracting 236 million visits a year by 2008. Digg’s decline started after it allowed advertisements to be shown on its site from 2010, alienating many of its users. By early 2012 unique traffic had fallen to below 5 million annually.
The sale came after most of Digg’s staff left the company for Social Code, a subsidiary of the broadsheet Washington Post, in May. Digg’s website will stay online, and Betworks is planning to release a cloud-based version of the Digg social sharing site.
Digg Chief Executive said ‘We couldn’t be happier to announce that the next generation of Digg will live on with the team from Betaworks.’ Betaworks will combine Digg with News.me, a news content aggregator which lets iPhone and iPad users access the best stories shared by people on Facebook and Twitter through an app.
Thursday’s buyout is a comedown for a company which was once the pride of Silicon Valley. The news aggregator raised $45 million in fundraising from established venture capital companies like Greylock Partners.
In 2006, Kevin Rose was featured on the cover of Businessweek, giving a thumbs up next to the headline ‘How This Kid Made $60 Million In 18 Months’. Despite this, Rose left Digg in 2011 because of an unpopular redesign. This added a Topic Newsroom and popular story statistics, but users were left angry after mainly publisher accounts gained the Top News slots.
Other changes included removing the favourites function, meaning users could no longer bookmark items that they liked. The Bury Button, which allow Digg users to self-police content and remove items which proved to be unpopular, was also scrapped.
Competitors such as Stumbleupon and Reddit profited from Digg’s unseemly downfall. By 2012, Reddit topped 23 million unique visits, whilst Digg fell to below 5 million.
Reddit’s success came as it catered to users whilst Digg began to lose contact with its core fanbase. This was highlighted in summer 2010. When Reddit needed cash to fix site problems it was having, 9000 people responded with subscriptions in just 10 days.
