Betaworks, a technology development company based in New York is buying Diggs. The company said it was attempting a revival of the news-sharing website that was out maneuvered by both Twitter and Facebook.
On Thursday, Digg confirmed it had sold its website, technology and brand to Betaworks. The sales price is practically nothing for a business that was able to raise close to $45 million from investors including Greylock Partners who invested in Facebook, Reid Hoffman the founder of LinkedIn and Marc Andreessen a venture capitalist.
Other bidders sent higher offers to Digg that included publishing and technology companies along with start-ups. However, the company decided on Betaworks because it felt the technology company had the best plan for being able to revive its brand. Betaworks has acquired a company site that still is well known and has a sizable audience of over 7 million visitors each month. Digg at one time was the most promising Silicon Valley start up. In 2004, the website was founded for consumers to gather their own collections of news and other content on Internet, instead of relying on newspaper editors’ choices.
The site rose quickly to prominence partly due to Kevin Rose the founder, the former talk show host on cable television. Rose was on the cover of BusinessWeek in 2006. In 2008, Digg was able to raise over $29 million from Highland Capital, Greylock Partners and other venture capitalists. The company, through the investment valuing was valued at $164 million.
Over time, the company has been rumored to be negotiating its sale to a number of companies including Google in 2008 for $200 million.