Another one bites the dust. According to the Wall Street Journal, Digg has been sold to New York technology development firm Betaworks for $500,000, a deep discount for a social-media site once valued at more than $160 million.
The website was founded in 2004 as a way for consumers to put together their own collections of news and other Internet content, rather than relying on the choices made by newspaper editors. 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.
In the fall of 2008, Digg raised nearly $29 million in venture capital from Greylock Partners, Highland Capital Partners and other financiers in an investment valuing the company at around $164 million, according to Dow Jones VentureSource.
But the audience started to drift away in early 2010 when services such as Facebook and Twitter exploded in popularity, as users preferred getting article recommendations from their friends or people they followed in addition to drastic website changes that users were rejecting. As a result, monthly unique users peaked in January of that year at 29 million, according to comScore, then rapidly began to fall.
Then came Reddit. Last December, Reddit drew more visitors than Digg for the first time, according to comScore, and since then it has maintained that lead.