Betaworks’ News.me Exits App Store, Team Focuses On Digg

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News.me, the social news service incubated at betaworks, announced today that it’s officially pulling its iOS apps out of the App Store. The company is also claiming that it’s yet another victim of Twitter’s latest API guidelines, and states that Twitter may have even viewed its service as a competitor. We might not go that far, but it makes for a good story.

Writes News.me GM Jake Levine on the company blog:

A few months ago, Twitter started building products to help people discover news. This move did not come as much of a surprise to us, but it put Twitter squarely in the category of “competitor” to News.me. When Twitter rolled out its latest API guidelines, the News.me apps were deemed to be in violation of the new Display Requirements. We had a decision to make: invest meaningful resources in the News.me apps to meet the new Requirements, or pull the apps from the App Store.

Here’s what it comes down to: we don’t want to invest time and energy into an application that competes with a platform on which it relies.

The News.me applications for iPhone and iPad offered users a curated news reading service, which pulled its stories based on what your friends were sharing on Facebook and Twitter. It would then analyze those stories using various signals like clicks, shares and comments to determine what was trending. The end result was a personalized news feed presented in an easy-to-read, mobile-friendly format designed for mobile devices.

Despite the fact that News.me lost access to Twitter’s API, that didn’t have to spell doom and gloom for the startup, even if that’s what the team is claiming via its blog post today. Its access to Facebook data was still viable, for example, and it could have gone on to incorporate other social signals outside of the Twitterverse, had they really believed in the product’s potential.

The untold story (or so we’d guess) is that News.me hadn’t gained a lot of traction. Meanwhile, betaworks is the new owner of Digg.com, which is trying to make a comeback. Like News.me, Digg is also about surfacing popular news content, it just goes about it in different ways. But there’s still an overlap there, and it makes more sense to just focus on the product that has a better chance at winning. In fact, Levine even alludes to this point, by saying:

With Digg, we’re better positioned than ever to answer the question posed above (“the Internet is full of great things, but how do we find the things worth reading and sharing?”) — to take what we learned from News.me to build the Internet’s best social news applications.

In fact, the News.me “goodbye post” even wrapped by talking about how amazing Digg is doing: 4 million users since its relaunch, millions of visits in terms of referral traffic weekly, and iOS app usage close to surpassing web usage.

As John Borthwick, betaworks CEO, reminds us today, none of this is really new news. When betaworks made the Digg acquisition the News.me team moved over at that time. The transition actually happened in July, so pulling the iOS apps from the App Store is just a final step in wrapping things up. He also notes that 80%-90% of News.me usage was via email, not apps, so the move to pull the apps from the App Store is not going to affect many users.

As for News.me, the team says they will continue to support the iPhone and iPad apps for those who had downloaded them. But it’s clear that the new focus going forward is all about Digg.