Betaworks Buys What’s Left of Social News Site DiggJuly 13, 2012 No Comments
SOURCE: The New York Times
For a while, Digg, the social news site, was one of the hottest things on the Web. But then it fell on hard times as services like Twitter and Facebook emerged and captured the Web’s attention.
Digg’s founders fled to greener pastures, and it seemed the service was headed for the technology boneyard. But on Thursday the site’s saga got a fresh twist: Betaworks, a technology incubator in New York, said it had acquired Digg.
Betaworks paid $500,000 for Digg’s assets, including the site and its technology, and Digg shareholders received equity in a new Betaworks unit that will use those assets, according to a person involved in the deal. That equity was worth something in the “single-digit millions,” this person said.
The precise value of the deal was not clear, but it was no doubt far less than what Digg was once worth. An investment round in 2008 valued it at more than $150 million, and at one point Google was said to have been interested in buying the site for around $200 million.
Betaworks invests in technology services and also creates them, having spawned Bit.ly, the link-shortening service, and News.me, an iPad-based news aggregator developed in collaboration with The New York Times Company. The new unit will combine the Digg assets and News.me, and John Borthwick, the founder of Betaworks, will become chief executive of Digg. Betaworks plans to create a new version of Digg that will be a complement to News.me’s iPhone and iPad applications.
Matt Williams, Digg’s chief executive, will become an entrepreneur in residence at the venture capital firm Andreessen Horowitz when the deal closes. In an interview, Mr. Williams said Digg had spent a significant amount of time looking for the right buyer, zeroing in on technology incubators that were interested in news-related start-ups. “Betaworks seemed like a great fit,” Mr. Williams said. “They want to reinvent Digg, and that’s exactly what they will do.”
Kevin Rose, the founder of Digg, said he had always been a fan of Mr. Borthwick and the companies he had nurtured at Betaworks.
“John understands the real-time nature of the Web and how to capture and surface trends as they occur,” said Mr. Rose, in a blog post on Digg’s Web site. “Given his experience with Bit.ly, News.me and Chartbeat, I can’t wait to see what he does with Digg.”
Mr. Rose is now at Google’s venture capital fund, and The Washington Post hired 15 employees away from Digg in May. No Digg employees will be making the move to Betaworks.SOCIAL BUSINESS