Media & Entertainment

Digg raises Series C led by USA Today owner Gannett to boost its aggregation chops

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As publishers of dead-tree newspapers continue to look for ways to pivot and profit from the massive consumer shift to digital platforms, one of the more storied of them is putting some money into an online icon to boost its position.

Digg, an early and popular mover in social media-based, online content aggregation, is raising another round of outside funding led by a strategic investor, Gannett — the longtime local news publisher and owner of USA Today.

The publisher that owns some 100 local titles is leading a Series C round in the company, a strategic round that will see Digg working more closely with Gannett to produce more content for USA Today’s digital effort USA TODAY NETWORK, and for Digg itself.

Digg, which says it has 40 million unique monthly users, and Gannett tell TechCrunch are not disclosing many financial details of this round, or about the other investors involved.

Digg, as background, was acquired by the New York incubator Betaworks back in 2012 reportedly for a mere $500,000 (some of its tech and IP at the time being purchased by the Washington Post and LinkedIn).

A spokesperson for Gannett says the round was in the single-digit millions. And Gary Liu, Digg’s CEO, confirmed to us that Betaworks is still in the frame after this round.

“Betaworks remains the largest shareholder of Digg,” the told TechCrunch. “In this round, Gannett was the lead, with participation from one of our previous investors.” Those previous investors include Betaworks and its backer Digital Garage, along with White Star Capital, Residence Ventures, Graph Ventures and Launch Capital. Most of Digg’s new set of investors have never been disclosed before, and nor have the details of its new funding (only a single round of $4 million has been disclosed to date).

(Before Digg redid its cap table with the Betaworks acquisition, its investors included Highland Capital, Greylock and Omidyar, all of whom are no longer in the company.)

For now, what we do know is that the investment will be used both to upgrade Digg’s own curation technology, as well as use it specifically to help USA Today build out its links and audience.

USA Today Network was introduced at the end of 2015 and has 100 million monthly unique users, and the idea is for Gannett, which split its print and broadcasting business earlier that year, to provide a more integrated brand and front for digital advertising across its local properties and USA Today.

While the companies are not spelling out too much about how Digg will work with Gannett, it sounds like one thing it could provide is a better search and recommendation engine to bring more traffic to various properties in the network when a user is visiting a particular article.

“Our team looks forward to working with Digg as we continue on our journey as a forward-thinking and innovative media company,” said Bob Dickey, president and CEO of Gannett. “Digg has an engaged audience, an impressive ability to discover the best content on the web, and analyze content in real-time. Working together, we will be able to quickly develop new content discovery products and bring them to market.”

It sounds like Gannett will also use the deal to create original content for Digg, in the form of native advertising. The companies, Gannett said, will “co-create high-quality branded content through USA TODAY NETWORK’s GET Creative studio,” Gannett said.

“We are excited to have one of the world’s premier media companies as an investor and partner,” said Liu in a statement. “Gannett’s impressive volume of great original content across the USA TODAY NETWORK will improve the discovery experience on Digg, and we are looking forward to building new products together that honor the tradition of high quality journalism.”

On the Digg side, the company is using the investment to upgrade some of its own tech. “The investment will allow Digg to accelerate innovation for content discovery products utilizing its powerful proprietary data, including across messaging platforms,” the company said in a statement. Messaging refers to the fact that Digg has been branching out from its basic website to third party platforms like Facebook Messenger and Slack, where it’s building news bots.

And to be clear, getting a media investor will not mean that Digg will be changing its own curation practices and potentially start adding in more Gannett stories.

“For clarification, Digg’s front-page curation will NOT change because of this investment (still editors + algo),” Liu told me. “IF we decide to post something from USA Today Network [it will be] based on our normal process. Having access to the original content will improve user experience.”

Updated with more detail, clarifications on how Digg and Gannett will work together.

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