The total price of the Digg acquisition was around $16 million | Hacker News Reader

The total price of the Digg acquisition was around $16 million

techcrunch.com

119 pointsantonioevans58 comments

So the story is the same:

"Digg the Web Property" sold for ~$500k which is tragic, good luck running that without a team.

The new info is that the "Digg the Team" was acquired for $12mil (whatever acquiring a "team" means, sounds like stock options executed and hiring packages all around) and bizarrely, "Digg the Technology Patents" were apparently worth about 8 times what the site is worth and went for about $4mil. I'm assuming that "Digg the Web Property" has some perpetual free license to the patents as part of the deal.

The Patent deal is probably overvalued as well (since it includes worthless patents like "click to upvote something", but probably represents LinkedIn trying to recoup some of it's massive lost investment. I wouldn't be surprised if the purchase value was an attempt to make the patents look like they are worth more than they are in prep for an eventual second sale to other parties.

All told, "Digg" sold for around 35% of its total investment, with 75% of that being the staff acquisition by WaPo, which essentially means that the actual "Digg" properties, patents, code, viewership, business deals, social network reach, ad network etc. was sold for about $4.5mil or less than 10% on the investment.

note that in a strange demonstration of why if failed as a social news site, the news of Digg's own sale has yet to show up on Digg's front page

> note that in a strange demonstration of why if failed as a social news site, the news of Digg's own sale has yet to show up on Digg's front page

What are you talking about? It's on the front page: http://digg.com/news/business/betaworks_is_buying_digg_for_5...

> the news of Digg's own sale has yet to show up on Digg's front page

The news is on Digg, about 2/3 down the page now.

When I first looked earlier today it was in the top five with less than 100 upvotes. Even now it has only managed 166. Even HN has surpassed Digg.

the irony of that is that digg started as a site just covering tech! in fact one might say that it started to go downhill when it expanded their categories...

The "click to upvote story" patent would be extremely valuable if someone ever found themselves in a patent dispute with Facebook. I can already see a lawyer explaining to jurors how a 'like' is the same as a zero length 'digg'.

Don't want to get in to whether the system should or shouldn't work this way, just that given the way the current system does work that the patent could easily be worth $4 million.

But doesn't Facebook's "like" predate digg?

Facebook's "Like" is surprisingly new; I found a Mashable article[0] from the day it was released in April 2010. Digg, on the other hand, is surprisingly old[1].

[0] http://mashable.com/2010/04/21/facebook-f8-2/

[1] http://en.wikipedia.org/wiki/Digg

Probably not, but K5 probably does.

How is this feature any different from the old Everything2 engine which dates from the 1999-2000 timeframe? The PerlMonks system, built with the same engine around the same time, also had a "one click vote" on answers not unlike Stack Overflow only a whole lot uglier.

There's no way this is patentable.

> 15 different Digg patents including the patent on “click a button to vote up a story.”

HN is doomed

Patent experts - how exactly does this work with Reddit / HN / a million other vote up content sites? Are they infringing?

Not really an expert, but they probably are, but the patent would probably also get overturned pretty easily.

IANAL, but wouldn't websites like bash.org be prior art for a “click a button to vote up a story” functionality? I'd be interested to see the exact wording, if anyone can find a link to the patent in question.

Looks like it is this patent

http://www.patentgenius.com/patent/7831928.html

If that's the patent in question, it's so specific as to be useless.

The first claim, which all other claims depend on, only claims the invention when 1) The voting patterns are being displayed in a "swarm interface" 2) The "thickness of a line" is used for visualizing the number of votes

I don't believe that any of the modern sites use a swarm interface at all, and if someone wanted to show a swarm interface, by using something other than the thickness of a line for the visualization, you've sidestepped the patent.

It's hard to believe someone paid good money for this.

> It's hard to believe someone paid good money for this.

True, and the article mentions 15 patents, so the remaining is hidden somewhere in the USPTO database.

how much does that cost to file this kind of patent generally?

It really depends on the specifics of the patent. Patents are usually very technical documents and their breadth tends to be much narrower than what non-patent lawyers assume.

In any event I will not going to examine Digg's particular patent because I do not want to get PG in trouble. But, as I said patents tend to be much narrower than non-specialists assume, so if someone mentions a patent, you should not panic but get a competent patent lawyer to determine what the exact scope of the patent is. Usually, it is not as bad as it seems and often you can get around it.

It's helpful to have people commenting who know what they're talking about. Question: what are some examples of ways that "often you can get around it"?

The scope of the protected invention of a patent is supposed to be defined very precisely by the claims (and indirectly by the specification, procurement history, etc.) If you have a very precise definition of what is protected, you can often find an alternative that is not protected.

Of course, I am speaking in generalities and individual cases may vary, but when people come to me with patent problems I often find a way to avoid a patent.

When non-specialists talk about patents they usually interpret the patent coverage based on the title or the summary, but the actual scope of protection is defined by the claims and it is usually much more narrow than the title suggests.

That reminds me of something I've always wondered. Suppose a patent has claims 1 thru 5. Does an invention have to copy all of them, or only one of them, in order to fall in the scope of the patent? What if you come along with a product that does, say, 1, 2, and 3, but not 4 or 5? Have you infringed the patent? Basically I'm asking whether the implied boolean operator combining the claims is AND or OR.

I expect you'll say what lawyers always say, which is "it depends", but it's my question and I'm sticking with it :)

You have to only infringe a single valid claim to infringe a patent. But some claims include all the limitations of other claims.

Ps i have to say that this is not legal advice and if you are asking this in relation to a real case, i strongly suggest you contact an attorney.

Heh - no real case, just general curiosity. But if you're still working in this area, you might want to put contact info in your profile. It wouldn't be surprising if someone around here made use of it.

Whether it is fringing depends on the decision process of the patent troll owning the patent:

1. Does the infringing party have a stash of money to pay for a quick settlement but not too much money that they could send a battalion of lawyers to countersue?

2. Is the infringing party a strategic competitor?

3. Is the infirning party holding a stash of patents of their own that they can sue you with?

4. Is suing the infrigner worth the risk of losing the suit and therby possibly invalidating the patent and therby making it worthless? You got to know when to save your ammunition for the real fight.

By these criteria HN and Reddit probably do infringe but is not a concern of whoever is holding the patent.

Fact of the matter is you can sue anyone for anything if you can afford the lawyers to do so.

I don't like this one bit. The end of it will be that somebody would have a brilliant idea along the lines "so, we're kind of cash strapped, why don't we sue the whole world to make them pay each time they put a button on a webpage?" and it'll cause a lot of grief to many people.

Not sue, just threaten: "We'll give you a license if you'll give us $0.0001 per upvote, or we'll sue you."

What if we pivot to a downvote only model?

Maybe HN should pivot into a lean button model.

HaterNews? I'm in!

Maybe a "click a thumbs up to vote up a story" - oops. Facebook got that one.

Maybe a "click an over-sized arrow to vote up a story" - oops, the stack overflow guys has that.

Maybe a "click +1 to vote up a story" - oops, Google plus has that one..

Quick, run for the hills!

Hover to kudos ... Ahh!

"Rose also pointed out that Digg once got an acquisition offer for close to $80 million ($60 million plus earnout) during the site's heyday. While he was personally willing to take this offer, the Digg board decided to turn it down."

http://www.readwriteweb.com/archives/kevin_rose_at_disrupt.p...

This story hasn't changed at all - the earlier reports were that the purchase hadn't included any of the staff, it's old news that they were hired by WaPo.

Still reported as 500k for the domain name, code, and traffic, which seems crazy low.

They have to pay licensing fees for the IP, according to that article. Its kind of weirdly phrased - don't know how you own code without owning the IP in that code.

You can hold the copyright on the code but still have no rights for the patents used therein.

Actually now that you phrased it that way, it makes total sense. The fact that the source of the code and the IP is the same made it seem bizarre.

Think Skype faced a similar scenario to this a few years back.

When compared to other overpriced sites, yes. But I think the price is quite realistic. It's not like, for example, meebo has a value of $100M.

It's still a bit pathetic in comparison to the 200 million Google offered them back in 2008…

Used to visit Digg daily. Then less and less after every redesign, now I suddenly I realize it is years now.

Yep I used to use Digg before HN, but the experience, especially on mobile, just kept getting worse and worse!

500K is too low for 100%. What likely happened is betaworks got 50-60% with the agreement they invest on the future of the site. Best deal for current shareholder, who still keep 30-40%. The 500K were not to buy the company, but to pay out some people who didn't want the new deal.

Very likely. The domain and traffic alone are worth way more than that.

So who gets the $12M that was paid for the team?

Probably the investors with preferred stock.

A team is not worth anything if they all quit the next day. Acquisitions of teams include substantial incentives to individual team members to induce them to stay.

Of the people I know who have been acquired in this manner, their payouts just to stay on were in the $500k-1M range. Given the way teams are usually valued, it suggests that the actual team members capture about half of the purchase value for the team.

Any time someone acquires a team, it is not simply a matter of buying a company. Members of that team can quit anytime they like. Acquiring a team means showing them enough money that they are willing to stay after the acquisition.

I do not know the terms of this particular deal but the rule of thumb is that acquiring a good engineering team will cost $1-2M per head. Some of that will go to investors but a big chunk of that will also go to the engineers as an incentive to stay on.

But why not recruit them idividualy or as a team the Ex Digg employes are not indentured.

This is the way the City (london) works its common for whole teams to be head hunted en block but the ex employers dosn't get anything.

The domain name alone is worth more than $500k.

But the domain was sold for just 500k. That's what surprising to me.

But the domain name is tied to IP (at this time)

So Reid Hoffman invested his own money and then LinkedIn blows several million in acquisition of IP from a company that is in the deadpool.

No conflict of interest there. Can't wait for the lawsuits.

This number makes much more sense if you are just talking their 7 mil uniques. I think the $500k was perfect "dot-com fail sensationalism".

I wonder if all the TechCrunch sock puppetting will kill hacker news ? Not that that is happening in this thread ...

what's Digg ?

It's a corporate press release aggregator maintained by teenagers with severe short term memory loss.

Same diff.

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