Betaworks, NY technology-investment/incubator, announced that it will buy Digg, a seven-year-old social reader for $500,000. According to Bloomberg, Digg will now operate as a part of News.me, a news curation startup funded by Betaworks that makes applications for the iPhone and iPad.
Digg raised about $40 million in venture funding, and pioneered Internet features like sharing stories with friends and at one point, was considered one of the hottest companies on the Internet. But the people who backed the company never saw a payoff, as Matt Williams, CEO of Digg, announced that after this merge is completed, he will be leaving the company to become an entrepreneur in residence at venture firm Andreessen Horowitz. According to Bloomberg, Williams became CEO in 2012, and make cuts in 37% of the workforce to make the SF-based company profitable by 2011. Digg also added new features to try to revamp its site, but still lagged behind Facebook and Twitter.
Digg will still exist in a version that complements the News.me iPhone and iPad apps, according to Williams.