Social Media Pioneer Digg Sold For Much Less Than Original Value

I’ve heard of Digg before, but I’m more familiar with Tumblr, Reddit, and other similar social bookmarking sites.  Tumblr, Reddit, Pinterest, and others are somewhat similar, but they have millions of users because of their own unique platforms that specifically cater to users.

So what exactly went wrong with Digg?  Why did it lose so much value?  Read the full article here.

“If other users like the content, then they can “digg” (vote for) it. If they do not like it, they can “bury” (vote against) it. The more diggs a page gets, the higher it ranks on Digg. The most widely dugg articles appear on the Digg home page, which gets a lot of traffic.”

In a surprise move for the entire online business community, social bookmarking site Digg was sold last week  for the unimpressive sum of $500,000. (Edited to add:  TheWall Street Journal originally reported it as selling for just $500,000, although  later reports pegged that number considerably higher when you factor in the patents that Digg owned and the engineering team.  One report says it was split three ways for a total of roughly $16 Million.  Whichever way you slice it, that number is much less than the $45 Million the site had been valued at years earlier. And the value of the site itself, i.e., the part that went to Betaworks, was pretty low. )

Some insist the sale was a final step in what has been a steady decline for the social media pioneer. Whatever the ultimate cause, there is a belief in the online entrepreneur community that Digg’s downward slide may be a cautionary tale about what happens when you don’t pay enough attention to your customers and community.

Do you go on Digg?  What are your thoughts on this?  Share with us in the comments below!