How the Mighty Have Fallen - Digg Sold for $500,000
A few years ago Digg was the undoubted darling of the web world. It was valued at over $160 million and such was the traffic impact of gaining a front page listing on the site that it became known as the Digg Effect as it would so often break a websites server with the surge in visits.
Those heady days however are long gone. They have struggled ever since a number of changes to the site were met unfavorably by a core of the sites users, and reports yesterday are that the site was sold for a paltry $500,000.
The buyer of the site is a New York based technology firm called Betaworks. They plan to merge the Digg site into its own news-sharing website.
It marks an incredible fall from grace for a site that has previously raised $45 million in venture funding during its history.
Betaworks is acquiring a website that still has a well known brand and sizable audience of more than 7 million visitors per month as of May, according to comScore but is far below its peek.
The site launched in 2004, offering users a means of sharing interesting news and online content, thus removing the need to rely on newspapers to curate news for them.
Digg users would post links on the site's home page, then others would vote on their choices, determining the prominence of the stories they posted.
"They were one of the first social media sites," says Kristina Lerman, an assistant research professor at the University of Southern California who has studied Digg and other social-news sharing sites. "They introduced social components like having friends and followers."
Their rapid rise peaked in 2008 when they raised $29 million in venture funding, but users started to drift away as sites like Facebook and Twitter gained in popularity.
The final nail came in 2010 when a site relaunch was slammed by regular users of the site, and by the end of the year traffic to the site had halved, with rival site Reddit overtaking them for the first time.
What are your memories of Digg?