Digg, the once proud social media giant, acquired by Betaworks for $500,000

Digg, once the top news aggregation and social media site on the web, has been sold to Betaworks for a paltry $500,000.

There's some interesting and - depending on your perspective - sad news from the world of social media today. The Wall Street Journal is reporting that Digg, once the top news aggregation and social media site on the web, has been sold to Betaworks for a paltry $500,000.

I say paltry because Digg, at its peak, was one of the most sought-after entities on the web, with some speculating that the popular social media site could have netted an acquisition deal in the tens of millions of dollars, if not more, had it chosen to cash out while it was hot and on top.

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Originally founded in 2004 by Kevin Rose - who would go on to become something of a tech/Internet celebrity himself - Digg at its peak was attracting upwards of 30 million visitors a month back in 2008. But due to a variety of factors such as the emergence of other social-based sites like Reddit and Facebook, problems with spammers, and site redesigns that many in the site's core community rallied against, Digg as a sought-after Internet entity slowly but surely began to lose its luster.

Under terms of the deal, which Digg confirmed closed Thursday, Betaworks is buying the Digg brand, website and technology. The price was just $500,000, three people familiar with the matter said—a pittance for a company that raised $45 million from prominent investors including LinkedIn founder Reid Hoffman and Marc Andreessen.

Betaworks was one of several companies bidding to acquire the remaining assets of Digg after Social Code, a digital media subsidiary of The Washington Post Co.,  in May hired 15 members of Digg's engineering team, more than half the company's overall staff. Some of the other bidders which included other technology companies, traditional publishing companies and start-ups offered more for the Digg assets, but Digg decided Betaworks had the best plan for reviving its brand, the people said.

So what does the future hold for Digg? As someone who has been an active Digg user for nearly six years, I can attest that the quality of the front page stories is not what it once was. What was once a must-check-multiple-times-daily website for the latest in news has since ceded that ground to other social media sites like Reddit and Stumbleupon. Nevertheless, Digg isn't necessarily dead just yet. They still have a considerable amount of brand cachet and the site still attracts a few million visitors each month.

Feature-wise, the Journal ntoes that Betaworks is planning to incorporate Digg into their News.me property which they launched back in April 2011.

News.me sends users links to news articles that their connections on Twitter and Facebook are reading and talking about. News.me, which uses an iPad and iPhone app and daily email newsletter, has about 10 employees.

None of Digg's remaining employees will join Betaworks as part of the acquisition. Chief Executive Matt Williams will join venture capital firm Andreessen Horowitz as an entrepreneur-in-residence.block

And so, it seems to be the end of an era for Digg.

In a blogpost addressing the acquisition, Digg CEO Matt Williams said:

We couldn't be happier to announce that the next generation of Digg will live on with the team from Betaworks. Betaworks is combining Digg with News.me, a Betaworks company with an iPad app, iPhone app and daily email that delivers the best stories shared by your friends on Facebook and Twitter. Digg will join a portfolio of products developed by Betaworks designed to improve the way people find and talk about the news. Betaworks founder John Borthwick will be the CEO of the new Digg.

Kevin Rose also added, “I've always been a fan of [Betaworks founder John Borthwick's] product vision and the companies he builds, funds, and advises. John understands the real-time nature of the web and how to capture and surface trends as they occur. Given his experience with bit.ly, news.me, and Chartbeat I can't wait to see what he does with Digg.”

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