Digg Sold

Once upon a time, the news aggregator site Digg was valued at $160 million. Yesterday, Digg confirmed that the site has been sold to Betaworks for $500,000. Some say the decline of Digg can be traced to the rise of Facebook and Twitter, while others blame mismanagement and a switch to support of sponsors over users.
A series of redesigns, some of which weren't well-received by users, also hurt the company. A site relaunch in the summer of 2010 triggered a backlash, with most users saying they preferred the old Digg. By the end of 2010, Digg's audience had fallen by more than half, according to ComScore.

Newer social-news website Reddit Inc. also stole some of Digg's thunder. Last December, Reddit drew more visitors than Digg for the first time, according to comScore, and since then it has maintained that lead.

In March of last year, Mr. Rose, the founder, resigned from the company. He is now a venture capitalist with Google Ventures.

Betaworks intends to fold Digg into News.me Inc., a digital media start-up that Betaworks launched in April 2011. News.me sends users links to news articles that their connections on Twitter and Facebook are reading and talking about. News.me, which uses an iPad and iPhone app and daily email newsletter, has about 10 employees.

None of Digg's remaining employees will be retained. Read more about the deal at the Wall Street Journal. Link -via Metafilter

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The redesign was bad but it was the "shut up, you'll get over it" attitude that did them in. Redesigns of any site end up upsetting some users and you can't please everyone but Digg couldn't tell the difference between the typical few who complain about any change and a huge uprising of influential users who had very legitimate gripes. Hopefully other companies will take Digg as an example of how not to handle customer push back.
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Once people realize sites don't care about their visitor's feelings & are only out to make money, people rush off to join the newest popular site.

MySpace died. Facebook is headed down that same road.
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Once your in-vogue internet company is worth $160 million here's some advice: SELL IT! Seriously, don't hold out for more - this is 'Deal or No Deal' on a grand scale so take the money while it's there, don't risk getting a box with $500,000 in it. Yes you'll kick yourself if the value rises to $250 million, but that $160 million will be some small consolation.
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