Digg – what is left of it at least – has been acquired by Betaworks, a New York-based tech company that creates and invests in technology services. It is the last in a series of sales that have led to the dismantlement of the social media giant. In May the Washington Post paid $12 million to hire away 15 members of Digg staff (almost half of the overall team), while LinkedIn is believed to have spent around $4 million for Digg patents – including one for the “vote up a story” button that was one of the site’s trademarks.

Once a breakaway star of the social media scene, ranking as the 24th most-visited site in the US and for a while capable of attracting more unique visitors than Facebook, Digg sold its remaining assets to the company responsible for the creation of Bit.ly and News.me for just $500,000 in cash and equity, according to the WSJ. Although the accuracy of this figure has come up for debate in the hours after the news hit the headlines, there is very little doubt that the amount of money exchanged was in the six-figure bracket, and not the millions. Whatever the exact details, it is a sorry end for a company that was almost bought by Google for $200 million dollars in 2008, and a testament to the change in fortunes Digg has experienced in the past few years.

Conceived of and developed by Kevin Rose, Owen Byrne, Ron Gorodetzky, and Jay Adelson, Digg was a news sharing platform created in 2004 that allowed its readers to drive the direction of the Internet’s news interest with the click of a mouse. Users could “vote up” stories they thought were interesting and “bury” those they didn’t like. Rose became a media sensation and famously featured on the cover of BusinessWeek accompanied by the headline “How this kid made $60 million in 18 months.” Digg’s is a fate that no doubt awaits many of the social media behemoths that at present we can’t imagine being without. MySpace’s decline has already proven that initial success will offer no protection when public mood changes or is captured by a newer, faster, shinier offering.

The company has been in steady decline since 2010, when it began to lose visitors at an alarming pace. Between March and April of that year the site lost a third of its traffic, dropping from 39 million to 24.7 million unique users. Matters were not helped by the unpopular changes, like the removal of the “bury” feature, that Digg introduced in the following months or by the arrival of competing sites like Reddit and the growing popularity of Twitter.

BusinessInsider is calling the sale “embarrassing,” but Digg’s low selling-price is only half of the story. Those sad to see the decline of one of the forerunners of social news sharing will be glad to hear that renewal and renovation are on the cards for Digg, which will be merged with the news aggregator News.me. Betaworks announced in a statement on its site: "We are turning Digg back into a startup. Low budget, small team, fast cycles. How? We have spent the last 18 months building News.me as a mobile-first social news experience. The News.me team will take Digg back to its essence: the best place to find, read and share the stories the Internet is talking about. Right now." Of course there is no telling to what extent it will be possible to re-invent a digital brand that has already experienced its fair share of disappointments, but it is possible that what seemed to be a humiliating end for Digg is in fact the beginning of a new and improved future.

Sources: WSJ, NYT, The Guardian (1) (2), Techcrunch, BusinessInsider (Image courtesy of Flickr user MarkBTomlinson)