Its Own Grave

Digg, the social news site, was just sold for a fraction of its former worth. Alexis Madrigal's take:

There is one clear lesson from Digg's sale: the technology that powered a once-massive social network is worth about $500,000. All the rest of the value derives from the people that use it. Though scaling is tough, any developer in the world can build some profiles and let people connect up. It's an act of genius — or an act of God, by which I mean luck — to design a site constitution that makes people want to build their online lives at your URL (or in your app). Social networking companies are not technology companies as much as they are community companies.

Adam Clark Estes says Digg was sold for more than most reports would have you believe:

[T]he sneers about Digg’s low selling prices were a little bit gratuitous. In fact, the price tag for Digg amounted to much more than half a million dollars. As TechCrunch’s Alexia Tsotsis pointed out in a Thursday night blog post, the social news site was sold off in parts over the course of the past few months. Earlier this year, Digg sold 15 patents to LinkedIn for between $3.75 and $4 million, and the Washington Post paid $12 million for about half of the company’s engineers. So in a sense, what was left to sell to Betaworks was just a fraction of the company.

The conventional wisdom holds that Digg did itself in through a disastrous redesign.