Alexis Ohanian
David A. Grogan | CNBC
Content aggregator Digg is making a comeback with the assistance of an unlikely partner: Reddit co-founder and rival Alexis Ohanian.
Ohanian and Digg founder Kevin Rose acquired the platform for an undisclosed sum. The deal is backed by enterprise capital firms True Ventures, where Rose is a partner, and Ohanian’s Seven Seven Six. The partnership was announced Wednesday in a video post to the corporate’s X account by which Rose called the partnership a “team-up he would have never imagined 20 years ago.”
Digg was founded in 2004 and rose to prominence as a significant outlet for trending news since it allowed users to rate stories. Rose made what became an infamously goofy appearance on the duvet of Businessweek in 2006 because the kid who “made $60 million in 18 months.”
The corporate said in a release that it goals to distinguish itself within the social media market by “specializing in AI innovations designed to boost the user experience and construct a human-centered alternative.” Digg said it would also create a platform that “prioritizes transparency, rewards human effort, and fosters enriching discussions.”
Ohanian also teased the collaboration, telling X followers on Wednesday that he was “working on something recent… but additionally old… but additionally very recent” and is “excited” to be partnering with Rose.
At its peak in 2008, Digg was reportedly valued at about $160 million. However the rise of Facebook and other social sites caused traffic to Digg to plummet. Meanwhile, Reddit, which was founded a yr after Digg by Ohanian and current CEO Steve Huffman, emerged as a direct rival to Digg by forming communities around forms of content and letting users similarly rate news stories.
In 2012, Digg’s brand and website were acquired by tech incubator Betaworks for about $500,000.
Reddit has continued its ascent, reporting nearly 102 million each day energetic users at the tip of the fourth quarter. The location gained widespread attention when it became the middle of the 2020 meme stock craze as retail traders inflicted huge pain on hedge funds shorting stocks using a subreddit referred to as Wallstreetbets.
Reddit went public on the Recent York Stock Exchange last March at $34 a share and has seen its stock nearly quintuple. Shares are up about 3% yr to this point and added 5.9% during Wednesday’s session.
Ohanian has moved on to other projects since he stepped down from Reddit’s board in 2020. He’s currently partnering with billionaire Frank McCourt in a bid for TikTok after President Donald Trump prolonged the initial deadline for the corporate’s Chinese-parent ByteDance to sell the social media platform or face a ban.
Rose said in a post on X that he and Ohanian “dreamed up features that weren’t even possible with yesterday’s tech.”
“The brand new @digg brings some great nostalgia, but we’re not here to only rebuild the past or clone a competitor,” he wrote.
— CNBC’s Ari Levy contributed to this report.
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