Digg sold for bargain basement $500,000

Web 2.0 pioneer Digg has been sold for $500,000 only four years after the site was valued at $175 million by investors.

The news-sharing service has been bought by start-up funding company Betaworks, which said it would combine Digg with its own News.me service and go back to basics.

The social news service was once at the forefront of sharing stories with other users, but a series of uninspired design changes and ill-advised content decisions saw it fall behind rivals such as Twitter, Reddit and Facebook.

“Digg is one of the great internet brands, and it was a pioneer in community-driven news,” Betaworks said in a statement.

The News.me team will take Digg back to its essence: the best place to find, read and share the stories the internet is talking about

“We are turning Digg back into a startup. Low budget, small team, fast cycles. How? We have spent the last 18 months building News.me as a mobile-first social news experience. The News.me team will take Digg back to its essence: the best place to find, read and share the stories the internet is talking about.”

According to Digg, Betaworks will also shortly unveil a new version of Digg to complement the current News.me iPhone and iPad apps.

The fall from grace has been swift for the seven-year-old company and although the company boasts its 350 Diggs, it has fallen behind the pack.

At its peak in 2010 it had some 40 million users, which was one reason investors bought into a funding round that put the company’s worth at $175m the same year.

But many subscribers left after an ill-advised redesign, while management decisions to remove some controversial content also riled users.

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