Betaworks buys Digg for $500,000; will start afresh with new team

It’s acquisition time as Betaworks acquires Digg, a popular social news website founded by Kevin Rose. Though no definite buyout price has been pinpointed but it seems Betaworks will be shelling out US $500,000 to acquire Digg. Betaworks’ founder John Borthwick will become the new CEO of Digg in place of the current CEO Matt Williams.

Digg was a much popular social website until the v4.0 update where users voted stories up and down [digging and burying] with the stories being dug the most appearing prominently on the newsfeed. The recent update alienated the users and primarily allowed Reddit and others to overshadow it. The dwindling business numbers and the recent move of fifteen site engineers to the Washington Post Company was an indication enough that an acquisition is near.

Betaworks, the company behind bitly [a popular url-shortner website], intends to re-transform Digg “back into a startup,” with low budgets, a small team and fast update cycles. It seems that a new team shall be formed at Betaworks and the existing Digg employees won’t participate. At Betaworks, the team will take over the management of the site and also work on launching a new “cloud-based version of Digg”  to complement the current iPhone and iPad apps..

According to Kevin, CEO Digg, “I’ve always been a fan of John’s [Betaworks CEO] product vision and the companies he builds, funds, and advises. John understands the real-time nature of the web and how to capture and surface trends as they occur. Given his experience with,, and Chartbeat I can’t wait to see what he does with Digg.”

Digg gained popularity thanks to useful features where users had the right to vote up or vote down existing content on their Digg timeline. Its founder, Kevin Rose was also featured on the BusinessWeek with a story on ‘How this kid made $60 million in 18 months’. However, after the version 4 update, Digg failed to capitalize the user’s sentiments and almost stole back their existing power, leading to its downfall.

The year 2012 seems to be the year of mergers after Google-Motorola, Facebook-Instagram, Microsoft-Yammer and now Betaworks-Digg.