Digg, the online news aggregator, has announced its sale to Betaworks, the New York based technology group, in a deal worth just £500,000.
The plan is for the Digg site to be merged with rival web new service News.me. Digg was once among the most popular new sources online, which allowed users to vote for their favourite stories and send the most popular ones to the front page for others to enjoy. With users promoting the stories themselves, Digg made for a different news reading experience than many other online news briefing services.
Since last year, Digg had been losing an amount of traffic to its rivals, but the release of a Facebook app indicated that Digg might have been making a comeback. In spite of this a sale has been made, and for a reasonably modest sum.
Since launching in 2004 Digg claims to have received more than 28 million stories, submitted by users, upon which a total of 350,000,000 articles votes had been cast, along with 40,000,000 comments.
In its heyday, Digg was one of the 100 most visited sites on the web, which raised the profile of young founder Kevin Rose; and even landed him on the cover of America’s Businessweek magazine. Rose left the company in 2011, however, following an unpopular site redesign which allowed rivals Reddit and Stumbleupon to capitalise on a loss of traffic.
The runaway success of micro-blogging site Twitter may also have played a role in the downturn, after becoming another valued source of web news.
Digg’s outgoing Chief Executive, Matt Williams said "Digg has always been a site built by the community, for the community
"Over the last few months, we've considered many options of where Digg could go, 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."
HitSearch Director Andy Redfern said "Betaworks purchasing Digg for just $500k when valued at its peak at 350 times more send out a stark warning to online start-ups - ensure your revenue model is correct from the start. Digg started around the same time as Facebook and although differing entities, they both still have a significant volumes of traffic on a daily basis yet Facebook ability rollout a successful revenue model has allowed it to hold its business value.
"Facebook need to drive more revenue from its advertising model without upsetting its audience if its share price is to hold steady. The future for Digg is bright, Betaworks have some excellent brands into which it can integrate and I suspect this will not be the last time we hear its name mentioned."