Digg’s sale is the exact proof of what happens to social media stars. Once upon a time, the social media site was worth some $160 million. Now, it sells only for half a million.
Social media site Digg could have definitely sold even for less than $500,000. At least it didn’t end up in the junk yard of once popular websites, like so many others before. Plus, Digg shareholders got equity in the new company which is worth, according to an insider, “single-digit millions”. So in a nutshell, Digg selling for half a million is a good thing.
This Thursday, company officials announced Digg was purchased by Betaworks. Both the website and the technology behind it were acquired in the deal. Officials haven’t revealed the actual worth of their deal, but three people familiar with it told the media Digg sold for $500,000.
In a blog post, Digg CEO Matt Williams writes there were several plans the management was looking into, but not many looked as good as selling. “Over the last few months, we’ve considered many options of where Digg could go” he said, “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” said Matt Williams. Digg founder Kevin Rose wrote on Digg website that John Borthwick, founder of Betaworks “understands the real-time nature of the Web and how to capture and surface on trends as they occur.”
The Wall Street Journal writes “the price is a pittance for a company that raised $45 million from prominent investors including Facebook investor Greylock Partners, LinkedIn Inc. founder Reid Hoffman and venture capitalist Marc Andreessen”. But Betaworks is truly reaping the benefits of this discounted price.
Digg remains a very popular brand, although Facebook and Twitter have long taken the lead and put it in the shadow. But, users still browse Digg. A comScore report published earlier this year, estimated Digg is monthly visited by some 7 million visitors.
Back in 2006, BusinessWeek wrote some estimated Digg was worth $200 million. “Digg is emblematic of the ethos of Web 2.0, new consumer and media sites revolving around social networking and do-it-yourself services” the magazine reported.