Digg, once the darling of the social media world, was bought Thursday by tech firm Betaworks for $500,000. Here's how the social news-sharing site lost out to rivals like Reddit, Twitter and Digg.

When Digg was formed in December, 2004, it was poised for greatness. It raised $45 million from venture capitalists sold on the business model, according to the Wall Street Journal, and it did well for a while, as people used the site to find relevant news and content crowd-sourced socially from its users.

But at some point it all went wrong, and the company ended up being sold for a pittance to Betaworks, despite Digg's still having a recognizable brand and attracting 7 million visitors per month as of May, according to the Journal.

Betaworks plans to combine Digg into News.me.inc, a startup the company launched in April of last year, the Journal reports.

That's a long fall from grace for a company that once was synonymous with the cutting edge. But that's how it goes in digital media, and Digg should be faulted for not understanding the game and adapting quickly as the world of tech advanced beyond its overly simplistic, stodgy interface and mission.

The idea behind Digg was an ingenious one: to harness the power of social media and crowd-sourcing to create an online community where people could contribute and consume news and other things they enjoy or found worthwhile.

If you liked something on Digg, you could choose to Digg or up-vote it, which meant it would rise to a more prominent ranking on the site, and therefore hopefully attract greater attention. It was a way to democratize all the content on the Web through one single, simple interface.

And for a time it was wildly popular, as it was basically the only game in town.

Kristina Lerman, a University of Southern California assistant research professor who has studied Digg and other social sites, told the Journal about the heyday of Digg: 

They were one of the first social media sites ... They introduced social components like having friends and followers.

The company shot to prominence, and the Journal reports that Google reportedly almost bought the company in 2008 for $200 million, but that the two companies couldn't agree to a deal.

At one point in 2008, Digg had almost 30 million visitors a month, making it one of the most-visited sites in the world, according to the Journal, but that didn't last.

Instead, competitors like Facebook, Twitter, and direct rival Reddit took Digg's marketshare almost overnight, and by 2010 the jig was pretty much up.

Digg failed to improve its business model, sticking with a links-based platform with no room or culture for photos, videos and memes. It stayed too newsy, and it stifled expression.

On Facebook, you can post anything. Your friends, posts, groups and everything else are laid out for you in a easy-to-use, evolving interface. Your news feed keeps you up to date, and you're basically free to express yourself and easily find out what your friends are doing.

On Twitter, you're limited to 140 characters, but everything is real time. Twitter provides the best running feed the world has ever had of the vein of human thought and experience. And it's extremely linear.

And Reddit. Reddit killed Digg more than anyone else because it made it unnecessary, obselete. It showed how overlord decision-making (or complacency) just muddies a clear vision, and it stole Digg's market share right out from under it like a magician pulling away a tablecloth. Now Reddit gets a billion-plus visitors a year.

Reddit, The Front Page of the Internet, as it has dubbed itself, has actually become just that: the place where you go to find out what's going on, what's interesting, what people care about. It's the place to find something genuine every time you boot up your computer. And it allows links, photos, silly questions, idiotic comments, touching tales, fascinating nuggets, whatever you or the rest of your Redditor compadres want. If people like it, it will get seen. People will have read it, viewed it or done it.

And Digg, well no one cares about Digg anymore. That's just the facts. Name the last time someone said I saw this thing on Digg or I was on Digg the other day. Long time ago, I'm sure.

That's because, like a clunky ocean-liner traveling through choppy water, it couldn't turn fast enough. Its execs got heady and refused to adapt. And in the Internet era, that's a death knell without compare.

Digg dug its own grave.