Betaworks Buys Digg Assets and John Borthwick Becomes CEO
The remaining assets of social news aggregator Digg — its site and brand — are being sold to Betaworks, the New York-based technology studio. Betaworks CEO John Borthwick will become CEO of the new Digg.
Once massive and influential, 7-year-old Digg has receded in recent times, but still has more than 16 million monthly unique visitors. It will be combined with Betaworks’ social news summary email service and app, News.me.
The Wall Street Journal is reporting that the deal was worth just $500,000, a massive decline in value, considering that the company had raised $45 million. Digg CEO Matt Williams disputed that figure, saying “the overall consideration is significantly larger,” and that it was a combination of cash and equity.
Williams, who was brought in nearly two years ago to replace founder Kevin Rose, is going to become an entrepreneur in residence at Andreessen Horowitz. In recent months, he has been working to sell the start-up, and had brokered a deal for its technology team with the Washington Post.
Betaworks plans to build “a new version of Digg from the ground up, in the cloud,” Williams said today. The team has been working for the past six months to rethink what Digg should be in 2012, while staying true to its original mission of helping people find great content on the Web, Williams said.
“We are turning Digg back into a start-up. Low budget, small team, fast cycles,” said a Betaworks blog post.
None of the Digg staff is coming along with the sale, except in transitional roles.
Previously, Digg’s tech team — which Williams said amounted to more than half the company — was picked up by the Washington Post, in order to work on its SocialCode subsidiary, which helps marketers buy ads on Facebook and Twitter.
Williams was appointed CEO in October 2010, on the heels of a redesign that wasn’t technically sound and alienated the Digg community.
In the past year, Digg tried for a return to social Web relevancy with a Facebook Open Graph integration that launched this past December. According to AppData, the Digg app for Facebook currently has nearly one million monthly active users.