A series of redesigns, some of which weren't well-received by users, also hurt the company. A site relaunch in the summer of 2010 triggered a backlash, with most users saying they preferred the old Digg. By the end of 2010, Digg's audience had fallen by more than half, according to ComScore.
Newer social-news website Reddit Inc. also stole some of Digg's thunder. Last December, Reddit drew more visitors than Digg for the first time, according to comScore, and since then it has maintained that lead.
In March of last year, Mr. Rose, the founder, resigned from the company. He is now a venture capitalist with Google Ventures.
Betaworks intends to fold Digg into News.me Inc., a digital media start-up that Betaworks launched in April 2011. News.me sends users links to news articles that their connections on Twitter and Facebook are reading and talking about. News.me, which uses an iPad and iPhone app and daily email newsletter, has about 10 employees.
None of Digg's remaining employees will join Betaworks as part of the acquisition. Chief Executive Matt Williams will join venture capital firm Andreessen Horowitz as an entrepreneur-in-residence.
Betaworks CEO John Borthwick will become Digg's new chief.
John plans to appoint Greenmac as his SEO (Socialist Enfeebler for Obunga).