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Businesses Social Networks The Internet The Media News Sold To Betaworks For $500,000 193

New submitter MyFirstNameIsPaul writes "The once popular social news website, which received $45 million in funding, is being sold to to Betaworks for $500,000. From the article: 'Betaworks is acquiring the Digg brand, website, and technology, but not its employees. Digg will be folded into, Betaworks' social news aggregator. This is not the outcome people expected for Digg. In 2008, Google was reportedly set to buy it for $200 million.'" Update: 07/13 12:26 GMT by S : Looks like real number is about $16 million.
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  • by jmorris42 ( 1458 ) * <jmorris@beau . o rg> on Thursday July 12, 2012 @07:05PM (#40633347)

    This is still 500,000 times what Newsweek sold for. So I guess it means failure in digital is still worth more than a failed dead tree product.

    All social media sites can expect to share this fate soon enough with the exceptions of facebook, twitter and a couple more than will survive for a bit. The whole model depends on scaling up to 'too big to fail' before the initial money runs out. And of course 'too big to fail' also fails eventually, see myspace and any number of other dead and forgotten sites that had their fifteen minutes.

    The only way to make money in this game is to piss off the users as you slap them in the face with the reality that they aren't customers.... they are the product. Yet the sole reason a social media site exists is because users want to be there, the defining feature is there is little created/curated content on a social media site, it is all user created. And since users aren't really tied to a site they are free to be fickle and jump to the next shiny thing they can share links to cat videos on. Which all means it is fairly easy to get a crapload of users, just give em free services; making a living giving away stuff to zillions of users is still a hard and mostly unsolved problem. Google is making money giving stuff away, anyone else?

    • Newsweek will also be around longer than Digg.
      • Newsweek will also be around longer than Digg.

        I am really doubtful of that, Newsweek will cease to exist after the election as at this point it is solely a propaganda rag that will lack use after the election is finished (no matter who wins).

        Meanwhile Digg will continue to sit there, possibly mismanaged but carrying on as it has been. They could probably simply leave it running as-is indefinitely and make money for quite some time off referrals and ad revenue.

        • I am really doubtful of that, Newsweek will cease to exist after the election as at this point it is solely a propaganda rag that will lack use after the election is finished (no matter who wins).

          I don't read Newsweek, but doesn't it do actual journalism, and digg just lets people vote up stories on other web sites?!? One is actually producing something, one isn't? (Which is the problem with most blogs, which just rehash other stories, often originally coming from actual journalists, usually happening to

    • by evilviper ( 135110 ) on Thursday July 12, 2012 @08:08PM (#40633965) Journal

      The only way to make money in this game is to piss off the users as you slap them in the face with the reality that they aren't customers.... they are the product. Yet the sole reason a social media site exists is because users want to be there,

      Every criticism you offer about online / social web sites could be equally well applied to something like broadcast television... And yet, they've been operating and profitable for a half-century now, with no end in sight, and the future looks fairly bright for them after the switch to HDTV, with only minimal potential for 'disruptive technology' on the horizon that could upset the good-old business model.

      Google is making money giving stuff away, anyone else?

      Yes: TV & Radio.

    • by Kjella ( 173770 ) on Thursday July 12, 2012 @08:34PM (#40634169) Homepage

      Yet the sole reason a social media site exists is because users want to be there (...) And since users aren't really tied to a site they are free to be fickle and jump to the next shiny thing they can share links to cat videos on.

      Perhaps, perhaps not. There's a huge amount of peer pressure of the "Why can't you use YouTube like everybody else? Stop being such a special snowflake." variety, maybe not for cat videos but for many other things. For example recently I needed to talk to some friends and their tool of choice is now Facebook Chat. Before that there was MSN, before that ICQ or IRC. I didn't choose to abandon any of those, but you can't be social without people to be social with. You can more than sustain a profit on those network effects as long as you don't become so obnoxious people leave in greater numbers than they join.

    • by glwtta ( 532858 )
      Something that's been around for 80 years, and at its height was selling 4 million copies weekly is a 'failed product' now?
    • The only way to make money in this game is to piss off the users as you slap them in the face with the reality that they aren't customers.... they are the product...[snip]....Google is making money giving stuff away, anyone else?

      That's kind of a narrow way of looking at how to extract money from social media. For example I saw a TV ad less than an hour ago for a social media site for car lovers and rev heads. The site itself is owned and operated by Shannons a specialist insurer for collectable cars and bikes but the content is generated by users uploading pictures, etc, to their virtual garage.

      In other words the insurance company is using it's existing repuation as a well known specialist to cut out the middle men. They are try

  • by Anonymous Coward on Thursday July 12, 2012 @07:07PM (#40633365)

    This would have been first post, but it was a missed opportunity.

  • by hovelander ( 250785 ) on Thursday July 12, 2012 @07:16PM (#40633433)

    If I remember correctly, wasn't Digg supposed to be the new Slashdot without the hardcore Geek Cred? Didn't Kevin Rose speak directly to CmdrTaco about the failings of Slashdot? Kevin doesn't seem that bad a guy, actually, but he had two major failings that I can see:

    - Not selling at the top of the market, which is usually hard to gauge anyway, (and didn't he leave some time ago?)

    and the most important failing:

    - Dumping Sarah Lane so that she could later travel the world on Honeymoon and get a brain eating parasite.

    Better Days to them both.

    • by Darundal ( 891860 ) on Thursday July 12, 2012 @07:23PM (#40633513) Journal
      IIRC, he left around the time of the Digg 4 update (the one that killed Digg and caused it's users to flood tons of other sites).
    • Re: (Score:3, Informative)

      by Anonymous Coward

      Digg was much bigger than /. when it was going at full steam, had better and more timely articles, and much bigger discussions due to its larger community. But the board chose a ridiculous redesign for V4 and refused to listen to the voice of the users. They thought the dip in numbers would be a temporary thing, people would soon come back. Well, they didn't. They left in droves.

      When the writing was on the wall, Rose bailed out giving control to others to try to resurrect the product his braindead decisions

    • by Ucklak ( 755284 )

      What are you talking about? He already sold out. It hasn't been Kevin Rose's baby since he sold it for the $45 milllion. He made out like a bandit.

      • by Dahamma ( 304068 )

        Do you have any citation for this? I was wondering if Rose made anything on Digg.

        The only reference I could find that he did was some Gawker story whose author had no clue how VC financing works, and was making idiotic guesses...

        "Allowing the VCs to put in enough money to make the investment worth their time, at a high valuation, would require substantial dilution, which would disadvantage employees and early investors. Much simpler to transfer shares directly from one large shareholder — Rose

    • by Cinder6 ( 894572 )

      Digg was actually a pretty good site when it was tech-oriented. Then there was an update (Digg 4?) that tried to draw in more crowds by adding all sorts of submission types. Pretty soon all the tech people left and the site was reduced to people posting "funny" pictures, random computer tips everyone knew about years ago, and top 10 lists. It used to be that an article required hundreds of votes to make the front page. Go look now: as of this posting, the first story has only 29 votes.

      • > It used to be that an article required hundreds of votes to make the front page I mostly agree. But one has to consider the whole power user thing as well. There were a number of people who used a variety of means to artificially inflate votes on stories they submitted. The main reason it would take so many people to get something to the front page was that people gaming the system were forcing those numbers. Just getting rid of the power users probably reduced the numbers instantly into a state more
    • The problem was it got way too political. Popular links were all about these crazy "Tea Party Proportion" anti President Bush Links. This attracted the general dumb masses who will follow or reject the idea based squarely on the political party the presents it.

      My father is like this. I love him dearly however we have different approached to politics...
      I remember in the Mid-1990's my father was saying to me... The Problem with health care is that we need to incorporate a systems like we have to cars in Ne

  • Forget Digg... (Score:5, Interesting)

    by billybob_jcv ( 967047 ) on Thursday July 12, 2012 @07:17PM (#40633439)
    What does that mean for the valuation of /.?
    • Slashdot has been relativity steady. About a new story an hour with an average of roughly 200 comments in each one.
      It has been like that for years.

  • by ackthpt ( 218170 ) on Thursday July 12, 2012 @07:27PM (#40633549) Homepage Journal

    This is why I won't buy stock in fazebook.

    • by Lotana ( 842533 )

      Just because the product/company is very finicky and short-lived does not necessarily mean that it is to be avoided in terms of investment.

      Social media companies are in essence bubbles. If you are careful, you buy the shares before or in its early stages of popularity and then sell them before everyone gets sick of it. Just like Pump-and-Dump only without the false positive misinformation (Owners do all that for you for free).

      It is quite a risky endevour though: You have to be extremely careful of the timin

    • I hate to say anything non-negative about facebook, but plenty of other traditional investments can be as ephemeral. Hence the term "bubble". On Monday stock in X can be worth something and on Tuesday it can be only worth the paper they print it on.

  • and I'm sure I speak for more than just myself when I say that. The first year or two of Digg's existence were actually alright, when interesting articles were actually posted on the front page. It degraded rather quickly, however, into a reeeeeally shitty aggregator. When I finally stopped going, it was almost completely top-ten lists and links to "funny" pictures.

  • by GoodNewsJimDotCom ( 2244874 ) on Thursday July 12, 2012 @07:47PM (#40633761)
    Digg was good for social media. People would submit stories, and then the cool ones would come to the top. Apparently a minor problem arose with power users who could spam their friends with messages,"Digg this cuz ur my friend", and a lot of them would. These power users eventually started getting corporate sponsor to astroturf, and their friends were oblivious so they still got Diggs. The actual user base didn't have much of a problem with this as you could read user names and just ignore them. I think the proper solution was to allow people to permanently ignore user posts, then power user spam would have been fixed.

    Where Digg went wrong was,"We gotta beat these power users to their own game!" So they made it so users could no longer submit stories. And then your entire feed was all corporate sponsored advertising. This is equivalent of turning prime time television into one giant informercial. I know nothing of value is lost there, but in social media, this is a group of people moderating news and it was pretty valuable until they killed it thinking we're all bunch of sheep who will just sit there and read advertisements all day.

    I'm glad is dead. I just hope doesn't pull something stupid too.
    • My sentence structure was ambiguous. When I said nothing of value is lost there, I meant if they turned television into one giant infomercial. Digg was actually a real loss because it was a very good community they trashed because they wanted to feed mass mindless advertising while making it look like users submit it. For a while was fun to go to watch the train wreck and everyone trashing it in the comments, but then their advertisements started becoming links to virus sites, so I stopped even
    • I'm glad is dead. I just hope doesn't pull something stupid too.

      Like employing/encouraging/allowing douchebags to game 9/10 of all submissions with a snowball's chance in hell of gaining any significant rank? Too late. According to recent revelations, the fix was in before even Conde Naste bought them up.

      Oh yeah...Fuck Babyman! And now, fuck DavidReiss666 (et al)

    • by Anonymous Coward

      Reddit is already dead from a usability standpoint. The largest subreddits are unrefutably crap, and the overall site is overrun by the hordes of idiots who infect the few decent, smaller subreddits. Unfortunately, the site has degenerated into a massive karmawhoring party and it is no longer easy to find quality links in the sea of regurgitated memes, 37-panel ragecomics about dropping a piece of toast, and Facebook screenshots. I never really cared for Digg, but did frequent Reddit from 2008 to 2010 befor

      • by mr100percent ( 57156 ) on Thursday July 12, 2012 @10:09PM (#40634837) Homepage Journal

        Once you disable certain obnoxious subreddits in your profile, the site actually becomes wonderful. Just turn off /r/atheism, /r/adviceanimals, and maybe /r/politics, and add the many TV/movie related and other cultural subreddits and you have a nice party.

        • It's still doomed... the simplistic moderation system just doesn't work over long periods of time without adjustments, all the original admins cashed out and the ones left are mostly asleep at the wheel at this point.
  • Wow. With a domain name like that how can they lose?

    At the end of the day I seem to keep returning to Facebook (family) Twitter (news and stuff that matters), and to a lesser extent Slashdot and a handful of RSS feeds.

    LinkedIn? Digg? Pictionary.. uh, I mean Pinterest? Flattr? Etc Etc Etc?

    Or maybe I'm just waiting for the Next Big Thing. Which will likely require 3D glasses.
    • One of those things is not like the others. Flattr is not social site, it's effectively a way to pay a cup of coffee to people who do nice things online. And it pools money on both ends, so you don't pay 60% of the donation on processing fees.

  • by mysidia ( 191772 ) on Thursday July 12, 2012 @07:49PM (#40633785)

    Will we see Digg's new owners taking up arms against Reddits, and all the other hundreds of sites that 'copied' their idea of user-rated submissions based on a thumbs up / thumbs down or "Like" / "Hate" system?

    Perhaps Facebook could be a target. Digg's "Digg" button did predate Facebook's "Like" button, and FB's "Like" functionality can be construed as a shameless copy of Digg's Digg function; granted FB didn't copy the counter, and Digg didn't provide a list of users that liked the article, or publish lists of articles liked by a user.

  • Too Funny (Score:5, Funny)

    by RapidEye ( 322253 ) on Thursday July 12, 2012 @07:57PM (#40633863) Homepage

    I seem to recall that Rose made Digg because he felt there was too much elitism on Slashdot.
    I guess elitism works!
    Vivo El Taco!!!

    • I guess elitism works!

      Maybe not elitism in itself, but focus. Other examples: science journals making a profit from paywalls, where general newspapers fail; Vi(m) continuing to flourish despite an interface more unfriendly that a word processor from the DOS era; the Soyuz outlasting the more technologically advanced Space Shuttle.

      If there's a lesson to be learned, it's that if you can't be the biggest brontosaurus in the jungle (a big web site), become a bird or a small but agile furry little creature (a fo

  • A similar fate awaits other social network websites, sooner than later. Social networking websites are like malls that after a few years start having a stinky smell, you know those malls you've seen them and been there.
  • by benjfowler ( 239527 ) on Thursday July 12, 2012 @08:38PM (#40634191)

    I think there's a BIG take-home to be had from the demise of Digg. Listen to your users.

    They REALLY screwed up with Digg 4, and completely dismissed the feedback from their users out of hand.

    Had they actually used their brains and done proper testing beforehand, instead of rushing half-baked shit into production, they might've done far better by now.

    Did I mention that it's a really good idea to listen to your users, and not walk around with your head up your arse.

    "Pride goeth before destruction, and an haughty spirit before a fall" -- Proverbs 16:18.

    • by Rytr23 ( 704409 ) on Thursday July 12, 2012 @10:49PM (#40635089)
      This. The second I saw that redesign, and the immediate response by Rose, I knew it was over. I really enjoyed Digg, but man they screwed the pooch on that redesign. I recall Rose's "contemporaries" (Rojas/Topolsky) defending it at first, then everyone kind of just quietly tip toed away as they saw the disaster that the Digg team had put together.

      BTW..The only reason I use reddit is because I can use an app to peruse the content without the HORRID site interface. And by horrid I mean fucking terrible.

  • by TimHunter ( 174406 ) on Thursday July 12, 2012 @08:40PM (#40634205)

    Talking to AllThingsD, Digg CEO Matt Williams confirmed that 'the overall consideration is significantly larger' and includes a combination of cash and equity. Another source close to the negotiations tells us that the price was indeed not $500k. []

    Okay, I got this link from Fark. Shoot me.

    • HA! HA! You're posting Fark links on Slashdot. Your dog wants steak. The Sun is there.

      \ Aisle seat please.
      \\ Its a street light!
      \\\ Summon Bevots!
      \\\\ Slashdot slashies.

      I can't think of any more classic Fark memes. This comment is useless without pics.

  • Digg (Score:3, Informative)

    by benjfowler ( 239527 ) on Thursday July 12, 2012 @08:44PM (#40634235)

    They suffered from a really shit moderation system too, which encouraged groupthink to a far greater extent than Slashdot. Slashdot, imho, is a scalable, robust moderation system done right.

    Digg was a sad joke in comparison, where simply having the "wrong" (e.g. liberal) opinion would have you Buried into a smoking crater.

    Another problem was sad, basement-dwelling "power Diggers" posting lowest-common-denominator crap all the time. The Dig/Bury model favours quick, cheap laughs at the expense of thoughtful debate.

    Although it has to be said that I got into some REALLY fun and entertaining fights with some utterly loopy American and Chinese rightwing extremists. Digg, given it's tendency to lower the IQ of everything it touches, attracted those kinds of people like flies to shit. But after the while, the aggro and stupidity got to me, and I quit my Digg habit.

    Can't say I'm sad to see it getting cut up for scrap.

    • Re: (Score:2, Insightful)

      by datavirtue ( 1104259 )

      New reddit user here.

      Your quote is spot on:

      The Dig/Bury model favours quick, cheap laughs at the expense of thoughtful debate.

      I find that if something on reddit takes me longer than ten seconds to digest I just click away. This is not my normal mode of operation btw, but the nature of the site leads me to this behavior.

  • Ok, so not Yahoo! (Score:4, Insightful)

    by John Bokma ( 834313 ) on Thursday July 12, 2012 @09:03PM (#40634379) Homepage
    I've mentioned several times the past years that Digg, which turned in a total crapfest back then, probably would be sold to Yahoo! soonish so they could properly kill it. I was wrong with the customer, but probably not wrong about the death of Digg. The past months it has been flooded by spammers and reporting them is pointless (nothing is done). Good luck, Betaworks, with cleaning up the mess.
  • is people. Digg is crap because most people who post are idiots.

    There needs to be a grown-up table, and the kids need to sit in the kitchen and be seen and not heard (from), just like the old days. :)

  • I say 'Good riddance'. I was a digg user for a few years, but the constant french-bashing, europe-bashing (even on unrelated topics) drove me away. Nothing as informative as /., or say, Engadget on tech news, and political discussions were more like a Quake IV arena than articulated, educated exchanges of opinions.
  • Digg pretty much just floated the most popular stories like Google News. I want to read the quirky nerd stuff. Slashdot and Wired with human editors are much better for that.

I've finally learned what "upward compatible" means. It means we get to keep all our old mistakes. -- Dennie van Tassel