Updated: Digg, Darling Of The Pre-Facebook Web, Sells Assets To Betaworks For A Rumored $500,000

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Via WSJ: Digg, the social news site and former Web 2.0 darling that was eventually pushed into obsolescence by then-newcomers Facebook and Twitter, has been acquired by Betaworks, the New York tech development behind popular links shortener bit.ly and analytics service Chartbeat, among others. The Wall Street Journal reports the price tag for the deal was just $500,000, though TechCrunch cites a source who disputes that number. That's a paltry sum for a company that Google reportedly offered $200 million for in 2008, before the deal fell through. However, trouble for Digg started to mount in 2010 after a controversial redesign led to the loss of a quarter of its audience; founder Kevin Rose departed in March of 2011; and the site lost its tech staff to The Washington Post this April. (Rose recently joined Google Ventures as a partner). Betaworks CEO John Borthwick will head Digg and reportedly plans to have the team behind News.me, Betaworks' news reader service, manage from here on out. What to expect next? A startup approach to rebuilding Digg, which means smaller budgets and faster cycles for new products, such as a cloud-based Digg in the works.

Update:The rumored $500,000 Betaworks paid covers only certain Digg assets which include the domain name, code, and data. The New York Times reports Digg shareholders also received equity in Betaworks worth millions. According to TechCrunch, the total sum for all of Digg's piecemeal assets falls closer to $16 million, which includes the $12 million The Washington Post paid for Digg engineers and the near-$4 million that LinkedIn spent to acquire various patents.

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