Shalom Life | January 26, 2015

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?

Startup Club: Forewards Startup Club: Forewards TrendingArtist Paints Lovely Portrait of Mark Zuckerberg, Using His Own Feces Artist Paints Lovely Portrait of Mark Zuckerberg, Using His Own Feces TrendingAmazon to Buy Israeli Startup for $350 Million Amazon to Buy Israeli Startup for $350 Million Trending
 

Startup Club: Forewards

January 26, 2015 | By Caitlin Marceau
Startup Club: Forewards

We speak to the CTO of the budding Toronto-based marketing company

Read More

Dutch Jews Want Army Troops Positioned Outside Synagogues

January 23, 2015 | By Daniel Koren
Dutch Jews Want Army Troops Positioned Outside Synagogues

Calls from Jewish leaders come in the wake of Hyper Cacher attack near Paris

Read More

Saudi Arabia Blames Israel for anti-Semitism at First UN Conference on anti-Semitism

January 23, 2015 | By JNS.org
Saudi Arabia Blames Israel for anti-Semitism at First UN Conference on anti-Semitism

Ambassador Abdallah al-Mouallimi cites Israeli "occupation" as reason for the rise in anti-Semitism

Read More

Report: Miss Lebanon Will not Be Stripped of Title After Selfie with Miss Israel

January 23, 2015 | By Ynet News
Report: Miss Lebanon Will not Be Stripped of Title After Selfie with Miss Israel

The beauty queen was heavily criticized by the Arab world after appearing in a photo with Doron Matalon

Read More

Rush Announces 40th Anniversary Tour, Could Be Their Last

January 23, 2015 | By Ashley Baylen
Rush Announces 40th Anniversary Tour, Could Be Their Last

The band is hitting 34 cities across North America.

Read More

Adam Sandler and Lena Dunham Discuss OCD on ‘Late Late Show’ [VIDEO]

January 23, 2015 | By Ashley Baylen
Adam Sandler and Lena Dunham Discuss OCD on ‘Late Late Show’ [VIDEO]

Maria Bamford and Judd Apatow also share experiences.

Read More

Seth Rogen Clears Up ‘American Sniper’ Nazi Comments, Apologizes

January 23, 2015 | By Ashley Baylen
Seth Rogen Clears Up ‘American Sniper’ Nazi Comments, Apologizes

'The Interview' actor explains the intention of his controversial tweet

Read More

Artist Paints Lovely Portrait of Mark Zuckerberg, Using His Own Feces

January 23, 2015 | By Daniel Koren
Artist Paints Lovely Portrait of Mark Zuckerberg, Using His Own Feces

The Facebook CEO is, again, the subject of Brooklyn-based KATSU's art

Read More

More Headlines