Betaworks, the New York-based technology firm behind popular web tools like bitly and Chartbeat, has added another company to its portfolio: Digg. 

The Wall Street Journal is reporting that Betaworks has agreed to acquire the social news site for a surprisingly low $500,000. According to people close to the situation, Betaworks is not hiring any Digg employees, and will fold the service into, a new company that alerts users to stories their friends on Facebook and Twitter are reading. 

Digg was founded in 2004 by Kevin Rose, Owen Byrne, Ron Gorodetzky, and Jay Adelson and is credited as one of the first social networking sites. It allowed people to share and promote news that was important to them. In a short time it grew to become one of the most popular websites in the world, bringing in 30 million users a month at the height of its popularity. Those numbers have since dwindled to less than half. 

Rumors of the company being sold have been floating around since 2006. In 2008, Digg entered talks with Google, with the search giant reportedly offering $200 million before retracting its offer. That same year, BusinessWeek, the magazine that once put founder Kevin Rose on the cover with the line "How This Kid Made $60 Million in 18 Months," reported that company was having trouble monetizing and losing a tremendous amount of money. 

A number of key people have left Digg over the past few years. Jay Adelson left in 2010. Kevin Rose resigned from the company last March. And this past May, The Washington Post poached 15 members of the company's engineering team. 

Digg's main competitor, Reddit, is enjoying a successful run as it is now the most trafficked social news website. 

[via WSJ