Digg.com Sold To Betaworks For $500,000

New submitter MyFirstNameIsPaul writes "The once popular social news website Digg.com, 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 News.me, 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.

Comments

Look on the bright side

[jmorris42]

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?

Re:Look on the bright side

[jmorris42]

Please note the important difference between free software and free services. If you release a piece of free software it costs almost nothing more if a million people download it vs a thousand. On the other hand if lots of people download and use it you are almost certain to get contributions in the form of feature enhancements, patches and bug reports; and history shows that you are likely to eventually generate enough general activity around the project to produce revenue. If not enough revenue to cover all development costs, certainly enough to cover the hosting bills since those scale fairly closely with general interest. The beauty of the cost of reproduction being as close to zero as to not make a difference is at the heart of the Free Software success story.

Now compare to free services like facebook. Every incremental user costs money. The only way, so far, to generate offsetting revenue is by ruthlessly marketing the users to advertisers. But users don't like that and venture capitalists are eager to throw money into the 'next big thing' so you are competing against free.

Re:Look on the bright side

[ChatHuant]

Many companies make money by making free stuff. Here are a few: Red Hat, Canonical, Facebook

But the product of Facebook is not the website, and neither are the Linux distros the final products of Red Hat or Canonical. It's like saying a fishing company gives the bait away free. The bait or the code are just production costs, expenses required in order to create their product. For Red Hat the product is support, sold to companies, and for Facebook the product is you, sold to advertisers.

Re:Look on the bright side

[evilviper]

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.

Re:Look on the bright side

[Kjella]

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.

When Kevin Rose Wanted to Eat a Taco

[hovelander]

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.

Re:When Kevin Rose Wanted to Eat a Taco

[Darundal]

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:When Kevin Rose Wanted to Eat a Taco

[rgbrenner]

digg is still bigger than slashdot.. about 5x bigger

http://www.alexa.com/siteinfo/slashdot.org
http://www.alexa.com/siteinfo/digg.com

Forget Digg...

[billybob_jcv]

What does that mean for the valuation of /.?

Re:Slashdot won't go for even that

[icebike]

Slashdot is very old when measured in Digg lives.

I used Digg.com a lot now I use Reddit.com

[GoodNewsJimDotCom]

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 Digg.com is dead. I just hope Reddit.com doesn't pull something stupid too.

Too Funny

[RapidEye]

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!!!

Re:What happened to Digg?

[geekd]

I used to visit Digg several times a day. Then they did a site redesign that was horrible. I stopped going there, and after a few days, realized I didn't miss it.

Note to slashdot: I've been coming here at least once a day since 1998. Note you have had redesigns but nothing too horrible, and I'm still here. Don't pull a Digg.

Re:All the Diggers went to Reddit

[ganjadude]

I liked the digg interface and usability, pre v4. redit has one of the worst designs on the web today, maybe only outdone by 4chan. The content is usually great but navigation is a disaster, thats something I like about digg and slashdot, while there ar elots of great things in idle, both digg and /. have a logical flow and easy to use nav. I suspect you are right though, alot of the digg regulars have migrated to reddit

Listen to your users

[benjfowler]

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.

Re: I was a Digg user six years

[Lucas123]

Kevin Rose did everything he could to drive away long-time, loyal users, first by killing off any social networking aspect and then by revamping the entire site so that it didn't resemble the original or have any of the functionality that made it popular. It was idiocy gone wild. Personally, I think Betaworks just got ripped off big time. Digg's been going down the drain for two years now, and nothing's going to revive it at his point. Why do you think Rose took a job with Google?

Re:The Writing is on the Wall, Slashdot

[zippthorne]

The phrase, "bully pulpit" does not mean what you're using it to mean. In that phrase, (credit to Teddy Roosevelt?), "bully" is a synonym for, "awesome" or "grand."

When you speak from a regular pulpit, everyone in the room listens, typically of the order of 200 people, because a larger room would be too large for the "amplification" technique of "sticking a hollow box over the speaker's head." The presidency is a bully pulpit because when you speak as President, potentially 300 million are listening.

Re:What happened to Digg?

[Cl1mh4224rd]

I used to visit Digg several times a day. Then they did a site redesign that was horrible.

It's important to point out that Digg v4 was quite a bit more than a "redesign". The closest thing I can compare it to is a ground-up rewrite of a major piece of software, where the new version not only looks different, but is missing some fundamental or well-liked features that were present in the previous versions.

Digg v4: How To Successfully Kill A Community

It's hard to understate just how badly Digg screwed itself over with v4. The backlash was like nothing I had ever seen in, or read about, any similar circumstance. I had Digg Support close my account toward the end of the user revolt. (I refused to migrate to Reddit, though, because that site's design was (and still is) just terrible. It might have good content, but even the Mona Lisa can't spruce up a rusted-out utility shed.)

Earlier this week I got the urge to visit Digg for the first time in a long time... and it is such a sad, pathetic thing to behold. Where the most popular stories on the front page used to break 1000 "diggs", they now have two- maybe three-hundred diggs. Where submissions usually had a minimum of several dozen comments, now only the most popular stories seem to break a dozen. Most have only one or two...