
The total price of the Digg acquisition was around $16 million - antonioevans
http://techcrunch.com/2012/07/12/digg-sold-to-linkedin-and-the-washington-post-and-betaworks
======
bane
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_

~~~
fleitz
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.

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

~~~
fooandbarify
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>

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

HN is doomed

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

~~~
hristov
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.

~~~
gruseom
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"?

~~~
hristov
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.

~~~
gruseom
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 :)

~~~
hristov
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.

~~~
gruseom
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.

------
mmaunder
"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...](http://www.readwriteweb.com/archives/kevin_rose_at_disrupt.php)

------
notatoad
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.

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

~~~
ojbyrne
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.

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

~~~
ojbyrne
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.

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

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

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

------
danielpal
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.

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

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

~~~
jandrewrogers
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.

~~~
mjwalshe
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.

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

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

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

------
jpdoctor
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.

------
antonioevans
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".

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

------
tudorw
what's Digg ?

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

------
chris123
Same diff.

