Seven-year-old media company Digg inc. will be acquired by Betaworks, a technology-investment company based in New York.
Digg will be acquired by Betaworks after years of struggling to compete with popular social networking sites such as Facebook and Twitter, and losing traffic to the likes of reddit.
According to Washington Post, Digg will now be merged with News.me, which is a startup that Betaworks funds. News.me creates applications for the iPad and the iPhone, according to Digg's Chief Executive Officer Matt Williams. Williams said that he will leave the company once the transaction is completed.
According to New York Times, Betaworks shelled out around $500,000 for Digg's assets, and that includes Digg's technology and the website. Digg shareholders also received equity in a new Betaworks unit. The until will be using Digg's assets, according to a person familiar with the deal. The source went onto say that the equity is worth millions.
According to Businessweek, even though Digg pioneer features that allowed people to share news stories with friends, investors never really saw a payoff. Investors put in around $40 million.
Williams, who became Digg's CEO in 2010, tried to make the company profitable by cutting the workforce by 37 percent. The company also redesigned their website and added more social features but it still failed to compete.