http://online.wsj.com/article/SB1000142405270230437380457752...
With that feeling in mind, the fact that the acquisition was for $500k and not $1MM or $10MM or $40MM is irrelevant: any number falling outside bucket (a) is a loss. And you don't get into venture capital without being able to metabolize a loss.
The people that plowed money into Digg had a charter to put ~$45MM at risk. That was their job: find a place for $45MM to live and, probably, die. One major investment in 10 generates a win that pays for the other 9. So: fuck it, right?
EDIT: The story has been updated with a new paragraph, "A series of redesigns..."
what did they acually buy? The know how? The technology? None of that is revolutionary today. And there is no community on digg right now whatsoever (unlike /. which still lives its own life).
Maybe the name is worth something, but I don't really think that it matters that much.
My guess is that you'll find similar people on Digg's and News.me boards. And this was just a way to a) write off Digg as a permanent loss off the books and b) transfer those assets cheaply to the other company, which might boost them from being a loser to being a winner
Noone sells Digg for $500K...not unless they are millions and millions in debt
That is nothing! I am installing cisco switch gear as we speak that s worth more than that!
I can't think of any service that could be built out that will benefit from that domain name though, s even for a four letter domain - I think they threw $500K down the tubes.
So either they spent 45m in past 4 years,
or they did not draw down all of it
or someone paid 1/2m for 10m in the bank?
Or am I fundamentally missing something obvious
But keep in mind that $45 million wasn't raised in the past four years.
On 9/08 they raised $28.7 million, and then another $5 million on 7/11. So they've raised $33.7m over the last four years.