Digg, Once Valued at $60 Million, Sells only for $500,000
In a blog post published Thursday, Matt Williams has confirmed the acquisition of Digg by Betaworks. The former CEO also confirmed that plans to sell the company have been going on for several months, although many of the offers have not been favorable. Now Betaworks is taking the reins over Digg, which it plans to merge with News.me, an online network for people to discover and talk about the latest, most happening news.
News have been circulating about the purchase price of Digg, and people who have insider access to the acquisition report that the once $60 million- valued company sold for just approximately $500,000. For a company considered as one of the pioneering social sites on the web, and one which had raised almost $29 million in 2008 and a total of $45 million from venture capitalists and investors, the half-million dollar selling price is too meager to be considered logical.
Yet, Digg’s web presence and pull started to wane in 2010, when Facebook and Twitter began to haul in more members. Both of these leading social networks offered the same services as Digg as far as article recommendations go. The huge difference, however, focused on the accessibility of friend-recommended articles on Facebook and Twitter. The last quarter of 2010 saw Digg’s audience reduced by more than 50%. This drastic fell-down was prompted by competitor Reddit’s continued rise as well as an unsuccessful site relaunch during the same year which left many existing users disappointed.
Founder Kevin Rose, who started Digg in 2004, resigned from the company last year. Plans of selling Digg in 2008 to Google for $200 million never materialized.
Betaworks CEO John Borthwick will sit as the new CEO of Digg, as erstwhile chief executive Matt Williams will work as Entrepreneur in Residence with venture capital firm Andreessen Horowitz.