Digg, a social media pioneer founded by TechTV alum Kevin Rose, and once valuated by Google for a reported $200 million, has been purchased by New York-based technology incubator Betaworks for a paltry sum of $500,000.

Betaworks says its going to integrate the core of the website into its fledging service News.me.

“Over the last few months, we’ve considered many options of where Digg could go, and frankly many of them could not live up to the reason Digg was invented in the first place – to discover the best stuff on the web,” Digg CEO Matt Williams said in a blog post.

“We are turning Digg back into a startup. Low budget, small team, fast cycles,” The Betaworks team said in a blog post. “The News.me team will take Digg back to its essence: the best place to find, read and share the stories the internet is talking about. Right now.”

Digg will join the Betaworks stable of properties which includes  Bit.ly, Chartbeat, and Bloglovin‘.

Digg’s founder Kevin Rose, who once ran the company as CEO, and who once hosted the titular Diggnation podcast, said in a statement on Thursday that he believes Betaworks “understands the real-time nature of the Web”.

“I’ve always been a fan of John [Borthwick's] product vision and the companies he builds, funds, and advises,” Mr. Rose said in a statement Thursday. “John understands the real-time nature of the Web and how to capture and surface trends as they occur. Given his experience with bit.ly, news.me, and Chartbeat I can’t wait to see what he does with Digg.”

In August of 2006, as Mr. Rose graced the cover of Business Week, his site was described by Alexa.com as the 24th-most popular website in the US, “nipping at the The New York Times’ (No. 19)”.

For Mr. Rose, the downfall of Digg has been a tragedy in five acts: Due to a botched launch of “Digg v4” – a bug laden remodeling of the website – and the dramatic rise in popularity of competitor Reddit, Digg was forced to lay off nearly 40% of its staff last year and work on “refocusing the service”. The nail on the coffin in the protracted death of the company came in March of this year, when Kevin Rose left Digg to focus on other projects.

In May of this year Revision3, another property founded by Mr. Rose, announced it had been bought by cable giant Discovery Communications for approximately $30 million.

According to his Twitter page, Mr. Rose is now a Venture Partner at Google Ventures, while The Washington Post hired half — 15 — of Digg’s remaining coding team. No Digg employees will moving to Betaworks.

As something of a valediction forbidding mourning, Digg CEO Matt Williams wrote on his blog Thursday: “Both Kevin and I would like to thank everyone who made Digg’s journey possible – our amazing community, our talented employees who have developed the site over the past 7 years.”