July 13, 2012
News.me Diggs In With Betaworks Acquisition
Enid Burns for redOrbit.com - Your Universe Online
Betaworks, a company that builds and fosters social media sites, but doesn't want to be called a fund or an incubator, acquired news tagging site Digg. Following the acquisition, Digg will be integrated with News.me, another property in the Betaworks portfolio.
After explosive growth a few years ago, Digg fell into a decline as users left for other social tagging sites such as Reddit and Pinterist. On Digg, users submit URLs for news articles, blog posts and other content on the web, which other users browse to find content they're interested in reading. To date, Digg has had over 350 million Diggs, 28 million story submissions and 40 million comments. However the company realized over time that they had to make some changes in the form of restructuring or acquisition in order to succeed.
The challenge for Digg was to find an opportunity that would keep the integrity on which Digg was built. "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 startup roots," said Digg CEO Matt Williams in a blog post on the Digg corporate site.
Digg appears to have put its property ahead of profits in the sale. The Wall Street Journal reports the deal was worth $500,000. Acquisitions of this sort generally bring in more than a few million, even in the current volatile market that brought Facebook's IPO down to lower than expected values.
News.me, the company which Digg will be combined with, also lets users share news stories and other web content, though primarily on Facebook and Twitter. The company has iPad and iPhone apps and daily email that delivers content in a digest form for users to browse.
"Digg will join a portfolio of products developed by Betaworks designed to improve the way people find and talk about the news," Williams said.
Betaworks founder John Borthwick will be the CEO of the new entity of Digg and News.me. Betaworks also claims Findings.com, Bit.ly, BlogLovin.com, Chartbeat.com and SocialFlow in its portfolio.
Betaworks already has a new cloud-based version of Digg in the works, which is built in a similar theme to the current News.me platform for iPhone and iPad users.
Williams said in his blog post that he will not stay with Digg. After the transition, the Digg CEO will join Andreessen Horowitz as Entrepreneur in Residence. Williams has had management positions over a number of startups. He was previously General Manager of Consumer Payments of Amazon.com. He was also CEO and founder of LiveBid, which he sold in May of 1999.
In 2004, Kevin Rose launched Digg. In his tenure as an entrepreneur he also launched Revision3, Poence and Milk. He is currently a venture partner at Google.
While Williams is set to leave Digg, the company has already shed some key employees. In May, the entire engineering team left to join SocialCode, a provider of social media advertising and intelligence and a subsidiary of the Washington Post Company.