Social news aggregation website Digg.com was founded by Kevin Rose. Yesterday it was announced that Digg would be selling their assets some of their core assets to Betaworks. Rose said that he sold some company shares during some of the venture capital rounds, but did not make a lot of money. However Rose remains optimistic with the new parent company of Digg.com
When Digg sold, the rumored price was around $500,000 for the domain name, the code, and the rights. Digg’s patents were sold to LinkedIn and some of their key employees were hired by The Washington Post in a transaction worth over $10 million. At one point in 2008, Digg was valued at over $160 million.
Rose acknowledged that Digg made a bunch of missteps that led to its massive loss in value. However he believed that Facebook and Twitter was a major reason why Digg lost its popularity. He also said that the company was slow to respond to criticism and when version 4.0 of the website was launched, the code was bad and a lot of errors were generated.
?We were desperately trying to figure out how to get traffic back,? said Rose. ?A bunch of the community had already revolted by the time we fixed it.?
?Twitter became a major place to find out what was breaking on the Internet,? he said. ?Facebook became a place to share links. Social media really grew up.” He said that these newer websites were simpler while it took 8 steps to post a link on Digg.
In regards to Digg version 4.0, Rose said ?We launched with broken code.? He added ?there is nothing worse than screwing up and not being able to fix it. There was no Amazon Web services back when we launched. It would be a lot easier to build Digg today.?
Rose said that Digg was generating around $3-$4 million in annual revenue and had 17 million monthly visitors. They had revenue left over from previous funding rounds as well. Rose said that if the company was scaled back to 5 employees, they could make a good amount of profit. Rose currently works at Google Ventures, a position he retained after the search engine giant bought his mobile application company Milk Inc.
Below is a post that Rose wrote on Google+
If you haven’t heard the news, I’m thrilled to announce that Digg is now in the hands of Betaworks (makers of bitly, chartbeat, news.me, and other great products). I’ve been a big fan of John Borthwick ( http://foundation.kr/11/ ) for awhile now and I’m excited to see where his team takes the product!
To the Digg community and staff. Thank you. Without all your hard work there would be no Digg. You were the first community to embrace social media/news and it was you that made the site. You were pioneers and truly changed the way we vote on and share content forever. From the bottom of my heart, thank you.
Lastly, I want to thank our investors. David Sze from Greylock has been there for me through good times and bad, always supportive, always helpful, always willing to meetup for tea and figure things out. He’s been a mentor, board member, and friend. I can’t say enough good things about Greylock and the world class organization they run. Also a huge thank you to Highland Capital (for being great board members and helping us scale during our growth phase), Andreessen Horowitz, Mike Maples, Brett Bullington, Ron Conway, Jay Adelson, Omidyar, and the slew of others that helped put Digg on the map.