Community site Digg has been acquired ‘for $500,000’ – update

Social news site Digg has been acquired by the company Betaworks for a suspected amount of $500,000. Years ago it was valued at tens of millions, but now many users have turned to Reddit.

Betaworks is the company behind Bit.ly and News.me, and Digg should complement the latter. A takeover amount is not announcedbut The Wall Street Journal say that $500,000 is involved in the acquisition. That amount is generally considered low. Digg has managed to bring in $45 million in investments in the past, and there were rumors that Google was looking to acquire the site for $200 million in 2008, while others were talking about a $60 million worth around that time. However, none of the previous negotiations led to an actual acquisition.

Digg was founded in 2004 by Kevin Rose. The site allowed its readers to submit and ‘digg’ news articles on the internet, and a large community quickly developed around the rating and downgrading of submits. However, its popularity quickly declined due to complaints about influencing the voting system. The exodus was accelerated in 2010 when a new site was rolled out that contained functionality that many users were not expecting and that also contained many bugs. beta works hopes now off to a fresh start for Digg by setting up a small development team with a low budget.

Update, 12.30: Digg .’s CEO say against All Things D that the actual acquisition price is higher and Techcrunch points notes that the Washington Post previously paid $12 million for Digg’s development team, while LinkedIn has already paid up to $4 million for multiple patents, including those on “clicking to rank a lot.”