Sold! Social News Pioneer Digg Sells to Betaworks (UPDATED)

Back in 2008, social news site Digg was valued at $164 million; now, it’s been sold for the relative pittance of half a million dollars, according to the Wall Street Journal. (AllThingsD has outgoing Digg CEO Matt Williams on record as saying that the deal was much larger and was a combination of cash and equity; still, it's far, far less than the site was worth at one time.)

The buyer is Betaworks, a “new medium” company that says it will fold Digg into (which sounds strikingly similar to Digg in its design and mission). In a blog post, Betaworks pledged to turn Digg “back into a startup” with a small budget, small team, and “fast cycles” and also return it to its former glory. In its own blog post announcing the sale, Digg mentioned that Betaworks was planning to develop a cloud version of Digg that would complement’s mobile apps.

Digg founder Kevin Rose
Kevin Rose, Digg's founder, on the cover of BusinessWeek in 2006

There were hifalutin hopes for Digg when it crashed the tech and news worlds in 2006, and indeed, the service blossomed. The idea of aggregating news based on users’ votes was as popular as it was purely democratic, and it caught on fast. The social Web has somewhat passed Digg by, as behemoths like Facebook have stolen away so much thunder, although there are plenty of Digg users still going strong. Betaworks clearly still sees value in it, if others haven’t.

Digg homepage
Digg's current interface

Side note: The original BusinessWeek story behind the cover photo is quite a trip down tech memory lane. There are ample references to “MySpace” and “Web 2.0” (when did we stop using that as a buzzword, anyway?) It seems like a long time ago, even though we have socks that predate it.

Update, Friday July 13th, 3:12pm: TechCrunch reports more details on the terms of the deal. According to the site, Betaworks snapped up Diggs' assets--code, data, traffic information, and domain--for between $500,000 and $750,000. However, the Washington Post loosened the purse strings and dropped $12 million for the Digg team back in May. Further, LinkedIn paid between $3.75 and $4 million for Digg's handful of patents. Thus, Digg has been broken up and sold off to three different buyers. The final price is still paltry compared to what the company was worth at its highest point, but it's a long way from half a million for the whole kit and kaboodle.
Tags:  Digg, Misc, social, Betaworks