Digg Sold Out: Reasons & Path Ahead

Earlier this year when Washington Post Company hired some 15 engineers from the site for some of its own social product development, it was only a matter of time till we heard Digg getting acquired. The news finally came out that Betaworks, better known for its services like bit.ly and news.me, has acquired Digg.com and the rumor was that the deal was closed for an eyebrow raising amount of $500K. Although as Digg' current CEO Matt Williams told AllThingsD, "the overall consideration is significantly larger" and includes both cash and equity. 

Matt Williams will be on the CEO position till the transition is over after which Betaworks founder John Borthwick will takeover as the new CEO of Digg. Since its launch around 8yrs ago, Digg accumulated around 350M Diggs, 28M Story Submissions and 40M Comments. So why a sold out for a company which promised more than we have seen in the past 2 yrs? According to Matt they "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 startup roots".

It sure looks like that the company really thought they lost they way. Looking to do a makeover in between the users, Digg made a revamp with the version 4.0 update that the site provided its users with in the summer of 2010. The update, dubbed as the 'new Digg', faced more challenges than ever. Poor reception, decreasing traffic made it difficult in the time of layoffs and some management changes. Soon after company' co-founder Kevin Rose left the company. He joined Google when the search giant acquired his latest startup Milk.

Digg raised a total of $45Mn in a series of fund raising roundups since its start. With one of the fund raising totaling around $5Mn, which closed last year, was said to have saved the company in tough times. Its reported without this fund raiser Digg wasn't going to last more than six months as far as the financial terms were concerned. The recent developments in the social networks raised a lot of competition for the company with users shifting their base to Facebook and Twitter; while preferring other similar sites to Digg Stumbleupon, Reddit etc also making it tough for them.

Betaworks, in the meantime seems to have plans laid out for the future of the service. The existing employees may not be moving over but its reported that the news.me team will be taking over the complete management of the site. The plans are also to turn "Digg back into a startup. Low budget, small team, fast cycles". News.me is a mobile first social news experience and the team will try to take Digg site back to its essence and revive the feature that the site was initially found for "the best place to find, read and share the stories the internet is talking about". Digg' new CEO John Borthwick said that they are "going to build Digg for 2012", suggesting some exciting news in the near future for the site and its service for users.