Oh how quickly the tides can turn in Silicon Valley. Most of us have been deluged by news of tech companies being valued to the stratosphere but a new piece of information also shows us how those valuations can quickly hit the ground in the fast-paced tech industry.
According to the Wall Street Journal, Digg has been sold for a measly $500,000. We say “measly” as the company was once valued at over $160 million. Furthermore, the Wall Street Journal says that Digg has in the past “raised $45 million from prominent investors including Facebook investor Greylock Partners, LinkedIn Inc. founder Reid Hoffman, and venture capitalist Marc Andreessen.”
Kevin Rose, founder of the has-been social media rock star company, has once graced the cover of BusinessWeek with the headline “How This Kid Made $60 Million in 18 Month.” That was how much Digg was valued in 2006, two years after it was founded.
It’s not that the company has confirmed that it has been sold for half a million dollars. Nonetheless, the Journal says that three unnamed sources who are “familiar with the matter” revealed the price a New York technology development firm has acquired Digg for.
What Digg has committed to reveal to the publication is that it has “sold its brand” to Betaworks.
The signs of the demise of Digg have not been discreet though. Back in May, 15 – or more than half of the company’s employees – Digg engineering team members went packing to Washington Post. The company’s valuation has steadily declined from the hundred millions.
So what killed Digg? Well, in essence it was Facebook and Twitter which had the added social layer of people you know (friends, acquaintances, etc) recommending stuff for you. Other sites like Reddit and Pinterest also contributed to the demise of Digg.
For those who don’t know, Digg was kind of like an aggregation site where users “Digged” content they liked which they posted on their pages. It’s a site where people sort of built their own front pages that other users can “Digg” content they liked.
Now, Betaworks is working to revive Digg. That’s a tall order but if they can pull it off, they have just bought one of the biggest discounts in the history of the tech industry. Otherwise, they just wasted their money.
The fall of Digg shows us how fast a tech company’s future can go down the drain. The adage telling companies to innovate or die is truly most applicable to the tech industry.
Do you think Betaworks can revive Digg? Is it worth reviving in the first place? Did you use Digg? Are you still using it? What do you think it would take to revive this fallen social media site? Tell us in the comments below.
Image from Scott Beale / Laughing Squid