Shalom Life | November 27, 2014

Digg, Once Valued at $200 Million, Sold for $500,000

Kevin Rose's once mighty startup purchased with plans to fold

By: David Shear

Published: July 12th, 2012 in Business » World

Digg, Once Valued at $200 Million, Sold for $500,000

Digg, the one time social sharing darling, with an estimated value of over $200 million in 2008, has been sold for a paltry $500,000 to New York based Betaworks.

The cautionary tale of Digg is not an uncommon one, and should be of concern to investors looking to get into the social media scene.

As of a couple of years ago, Digg was considered one of the hottest startups, founded by member of the tribe, Kevin Rose, who adorned every every magazine cover from Business Week, to Inc. and many others, and was one of the wonderboys of Silicon Valley. But much like the story of MySpace, which was started by a fellow Jews, Tom Anderson and Brad Greenspan along with Chris DeWolfe, the final chapter of Digg was not a pleasant one.

MySpace, at one time the most popular social media site in the world, and the most visited site on the internet, even surpassing Google, sold to News Corp in July 2005 for $580 million. From there, the progress of the site could be charted as a straight downhill slope, eventually leading to the sale of the company to Specific Media LLC and Justin Timberlake for $35 million in June, 2011.

Digg, much like other businesses in the industry that show some hope, raised massive amounts of money from investors, over $45 million since launching in 2004. The company is now expected to be folded into News.me.

In recent years Digg has run into serious operational trouble, which had many people foreseeing its eventual downfall. There were various relaunches which were met with mixed to poor reception, plummeting traffic, lost revenue and the eventual step-down of Rose, who left the company in March 2011.

How many more overvalued-internet-darlings-to-bankrupt-disasters will it take for investors to re-examine the way they look at these businesses before investing? Will the eventual collapse of Twitter, Pinterest or another giant be the wakeup call needed?

Looking for an Alternative to Uber or Lyft? Try Schlep! [VIDEO] Looking for an Alternative to Uber or Lyft? Try Schlep! [VIDEO] TrendingThe Essential Hanukkah Gift Guide 2014: Piece of History [GIVEAWAY] The Essential Hanukkah Gift Guide 2014: Piece of History [GIVEAWAY] TrendingChinese Airline To Open Tel Aviv - Beijing Line Chinese Airline To Open Tel Aviv - Beijing Line Trending
 

The Essential Hanukkah Gift Guide 2014: The Unemployed Philosopher's Guild [GIVEAWAY]

November 26, 2014 | By Daniel Koren
The Essential Hanukkah Gift Guide 2014: The Unemployed Philosopher's Guild [GIVEAWAY]

See inside for your chance to win a "Jew's Glasses" 4-pack of either your favorite Jewish entertainers, thinkers, artists or writers

Read More

Even with Thanksgiving, Israelis Still Eat More Turkey Than Americans

November 26, 2014 | By JNS.org
Even with Thanksgiving, Israelis Still Eat More Turkey Than Americans

Israel is actually the world leader in per capita consumption of turkey

Read More

UJA Federation of Greater Toronto Approves Funding to Strengthen Israel’s Southern Region

November 26, 2014 | By ShalomLife Team
UJA Federation of Greater Toronto Approves Funding to Strengthen Israel’s Southern Region

A UJA committee was in the Holy Land last week, witnessing firsthand how funds donated by the Canadian Jewish community are being used

Read More

Jewish Hall of Fame: Billy Joel

November 26, 2014 | By Caitlin Marceau
Jewish Hall of Fame: Billy Joel

This week's inductee is the "Piano Man" himself

Read More

This British City Council is Banning All Israeli Goods

November 26, 2014 | By Daniel Koren
This British City Council is Banning All Israeli Goods

Leicester, the 10th largest city in the U.K., has opposed the Labor Party's recommendation not to join the BDS movement

Read More

Israeli Police Are Using Spy Balloons for A Better View of Jerusalem

November 26, 2014 | By Daniel Koren
Israeli Police Are Using Spy Balloons for A Better View of Jerusalem

Incorporated to keep the city safe after a wave of terrorist attacks

Read More

Mel Brooks Joins 'Hotel Transylvania 2' as Dracula's Dad

November 26, 2014 | By Sara Torvik
Mel Brooks Joins 'Hotel Transylvania 2' as Dracula's Dad

The legendary comedian will play Vlad, who brings drama with him on a family visit.

Read More

Lena Dunham Rocks Out to Hip Hop Song Named After Her [VIDEO]

November 26, 2014 | By Sara Torvik
Lena Dunham Rocks Out to Hip Hop Song Named After Her [VIDEO]

Hand Job Academy is back with a second music video after their first hit, 'Shark Week'.

Read More

More Headlines