In 2008, Google offered $200m for it. Today, Digg was sold for $500,000
Former darling of social media changes hands for a pittance as users move on to other attractions
It was the darling of "Web 2.0", a social media site worth $200m (£130m) which had the potential to outshine Facebook.
But the Digg website has been sold for just $500,000 after its founders became the latest internet shooting stars to crash back to Earth.
Founded by Kevin Rose, then 27, in 2004, Digg allowed users to share and rank their favourite web links. The model, in which news stories with the most votes rose to the top of the service, helped to kickstart the social media boom.
Mr Rose became an internet “rock star” as the site became one of the web’s most viewed. He featured on the front of Business Week, with the headline: “How this kid made $60m in 18 months”.
Digg was valued at $175m and in 2008, Google reportedly offered to buy it for $200m. But today Mr Rose and his co-founders sold the site to a New York company, Betaworks, for a hugely discounted $500,000 plus equity. The service was “going back to its start-up roots”, its managers said.
Digg started to falter after Facebook and Twitter allowed people to share recommendations directly with their friends and followers. Staff became disillusioned after the Google approach was rebuffed and the majority of the company’s software engineers, vital for maintaining the service’s innovative appeal, left in May for a rival. Mr Rose himself quit last year to work as a venture capitalist for Google Ventures.
Users disliked a series of redesigns and web traffic migrated to competitors such as Reddit and StumbleUpon. By the end of 2010 Digg’s audience had fallen by more than half, although it still gets more than 16 million unique visitors a month.
The sale price represents a big loss to the investors who put up £45m in private equity at its peak.
Matt Williams, Digg’s chief executive, wrote in a blog post: “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 start-up roots.”
Digg: What is it?
The Digg website is entirely created by users selecting and sharing news. When other users like a story or video link placed on the site, they click the Digg button. Links with the most Diggs rise into the top 10.
Top stories today included “FBI forensic review could free thousands of prisoners” and “11 tips for growing the world’s longest moustache”.
Life & Style blogs
Plus London's buy-to-let hotspots and a new property portal
Guest post by Richard Sexton, business development director of e.surv chartered surveyors
Plus lateral thinking and living on London's waterways
Facial hair: Cat beards and the purrrsuit of excellence
Price of Xbox One may be less than 360 say insiders
Microsoft's Xbox One: Have the price (£399) and release date (30 November) been leaked by online retailer Zavvi?
Xbox One vs PlayStation 4: Why Microsoft's console name game just doesn't add up
The 10 Best salt and pepper sets
- 1 What, let gays get married? We must be bonkers
- 2 'Something passed underneath us, quite close': Airbus A320 has close encounter with UFO
- 3 Rocky Horror star Tim Curry 'suffers major stroke'
- 4 Lord of the Sings: Sir Christopher Lee, 91, to release heavy metal album
- 5 Exclusive: Woolwich killings suspect Michael Adebolajo was inspired by cleric banned from UK after urging followers to behead enemies of Islam
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Nook is donating eReaders to volunteers at high-need schools and participating in exclusive events throughout the campaign.
Get the latest on The Evening Standard's campaign to get London's children reading.
Win anything from gadgets to five-star holidays on our competitions and offers page.