Once a Social Media Star, Digg Sells for $500,000

The Wall Street Journal: Unnamed “people familiar with the matter” say that development firm Betaworks has signed a deal to purchase Digg for just $500,000. Digg, a social news reader site, once seemed to have a much more promising future. It raised $45 million from prominent investors and was valued at more than $160 million. Founder Kevin Rose appeared on the cover of BusinessWeek under the headline “How This Kid Made $60 Million in 18 Months,” and the site previously received purchase offers as high as $200 million.

Betaworks will combine Digg with its News.me division. None of the current Digg employees will work at the new entity.