Betaworks has developed a model for these rapid launches and development cycles (100 to 150 days), and the company relies heavily on data to see if they stick in the marketplace. On Wednesday Betaworks launched Poncho, a super simple weather app; a couple weeks ago there was Giphy, a search engine for GIFs, which Borthwick said was so popular that 2 million users crashed the system when it first launched. Before that there was tapestry, a collection of mobile tappable stories.

But when Betaworks isn’t churning out its own content, it’s slicing, dicing, merging and mixing the content of others. One of the things that Betaworks is most famous for is its acquisition of the former social reading site Digg for a reported $500,000. Betaworks then merged it with some of the tools of its sluggish News.me creation.

Borthwick said that when the company bought Digg it had $250,000 a month worth of legacy costs, with $10,000 in monthly operating profits. Digg was jacked up and it had to pull out the needle, said Borthwick. After switching over to Amazon, building a new stack and relaunching with Betawork’s algorithms, Digg now costs closer to $20,000 a month to operate. “That’s the math of the cloud,” said Borthwick.

The overhaul seems to be working. The new Digg, and its users, are highly mobile-centric. Fifty percent of the traffic during the week and 55 percent on weekends comes from mobile traffic, said Borthwick. It was closer to 5 to 6 percent mobile before the relaunch. Digg now has a couple of million “active, rabid” users, said Borthwick. The Betaworks team pays particular attention to the amount of engaged users on Digg, which is high.

Attention is being fractured into a bipolar fashion, leading to condensed, fractional content on one hand and uber long-form content on the other. It’s Twitter vs House of Cards and Homeland, explained Borthwick. To build media companies and products in this era, you have to keep an eye on both, said Borthwick. To address that long form content market, Betaworks has created some tools over the past year around long-form story telling.

Not all of the innovation will come from newly launched media projects. Borthwick said he admires the work that Forbes and Bloomberg have done, as well as new media sites like The Huffington Post, Buzzfeed and Upworthy.

CHeck out the rest of our paidContent Live 2013 coverage here, and a video embed of the session follows below:

Lerer co-founded the Huffington Post and now serves as managing director at Lerer Ventures. “It’s the best time in the last eight years to invest in digital content companies,” he said. With the technology for the web as well as mobile having been more or less built out, it’s now time to fill those pipes, he argued. “Content is king at a certain time. And I think content is king now.”

However, Lerer also cautioned that digital media investments are risky, with timing being everything. “If you’re too early, you lose all your money. If you’re too late, you don’t make any money,” he explained. And when you give cutting-edge companies seed money, it’s hard to predict how their business plans are going to pan out. “You have to kind of take the measure of the person,” he admitted.

So what are the big trends Lerer is seeing in media, aside from a huge shift to mobile? Video will play a huge role going forward, but there’s also a more fundamental shift in how consumers look at media properties. In short, they ignore everything media execs hold dearly. Instead of expecting a curated front page, they’re much more comfortable with a social feed, Lerer said. “When they see a Buzzfeed – to them, it’s just normal,” he added.

In the end, the companies that aren’t married to those old rules will prevail, Lerer argued: “I think the world is ending for traditional media companies, but it’s just beginning for digital media companies.”

Correction (04/19): A prior version of this story quoted Kenneth Lerer saying that 65 percent of Buzzfeed’s traffic is coming from mobile devices. We were subsequently contacted by a Buzzfeed spokesperson, who clarified that Lerer misspoke and that the site gets 50 percent of its traffic from mobile devices.

Check out the rest of our paidContent Live 2013 coverage here, and a video embed of the session follows below:

A transcription of the video follows on the next page

Go to page 2 (of 2) on paidContent .

Reuters had reported Wednesday night that the Betaworks-owned company had something in the works, and on Thursday the company released a blog post explaining that it has been working on something around Reader, but will speed up production in light of Google Reader’s imminent demise on July 1:

“We’ve heard people say that RSS is a thing of the past, and perhaps in its current incarnation it is, but as daily (hourly) users of Google Reader, we’re convinced that it’s a product worth saving. So we’re going to give it our best shot. We’ve been planning to build a reader in the second half of 2013, one that, like Digg, makes the Internet a more approachable and digestible place. After Google’s announcement, we’re moving the project to the top of our priority list. We’re going to build a reader, starting today.

Since 2010, when we started working on News.me at betaworks, we’ve been obsessed with building tools that surface the most interesting things on the Internet, in real-time. That’s what has guided our approach to rebuilding Digg, and it’s with that experience behind us (including a whole load of mistakes), that we will build the new reader.

We hope to identify and rebuild the best of Google Reader’s features (including its API), but also advance them to fit the Internet of 2013, where networks and communities like Facebook, Twitter, Tumblr, Reddit and Hacker News offer powerful but often overwhelming signals as to what’s interesting. Don’t get us wrong: we don’t expect this to be a trivial undertaking. But we’re confident we can cook up a worthy successor.”

Om published an interview Wednesday night with Google Reader creator Chris Wetherell, who’s working on his startup Avocado now, and Wetherell explained that Google Reader always lived on borrowed time. But as Buzzfeed’s John Herrman pointed out, the RSS reader was still driving significant traffic for many publishers, and as Laura Owen wrote for PaidContent, Google Reader’s demise could have a significant impact on digital publishers and news outlets.

Whether Digg’s new product solves the problems that Google Reader’s exit creates is unclear, but creating a news reader built on RSS from scratch could allow for some innovation around a product that hasn’t changed much since the mid-2000′s. If you’re interested in following Digg’s progress, the company has a sign-up list … along with a highly depressing countdown until Google Reader is really dead.

In other words, another Twitter app bites the dust.

“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,” News.me wrote on its blog.

The company said it will continue to support existing apps that users have downloaded, but it will no longer be available in the App Store. It explained that new display guidelines from Twitter announced this summer meant News.me would either have to devote considerable efforts to make its app compliant, or it would have to pull the plug and re-focus elsewhere. The company has picked the latter, a decision that isn’t the first of its kind and likely won’t be the last.

News.me is an app that pulls links surfacing in a user’s Twitter and Facebook streams and aggregates them for a pleasant, curated reading experience. In other words, it wants to show you what your friends are reading and what are the must-reads of the day.

The app has an interesting history, in that it was originally created by developers at the New York Times as a way to monitor the most interesting news coming out of social networks. The people behind the app eventually formed a partnership with Betaworks, the New York-based incubator, creator of Bit.ly and recent purchaser of Digg, which eventually acquired News.me. So the News.me staff said they would be re-focusing their efforts on Digg, an interesting turn of events for the re-emerging social platform.

The Kindle highlights feature lets reader select and “clip” favorite quotes and passages from the ebooks they are reading, then access those highlights online later. At launch, Findings’ main feature was the ability for users to easily share those Kindle highlights with others by syncing their Kindle account with the Findings’ web bookmarklet. Applications such as Evernote also let users sync and save their Kindle highlights.

Findings maintains that web clipping has become an increasingly important part of the service it provides, though Betaworks CEO John Borthwick acknowledged that the ability to share Kindle highlights was the reason many people started using Findings in the first place. He said that Amazon had known about Findings for a year and had been fine with the service until now. ”I don’t want to intuit what Amazon’s motivations are,” he said, but suggested that the decision was driven not by Amazon but by book publishers: “This is probably what publishers want.”

That sentiment is echoed in a blog post from Findings general manager Lauren Leto. “Amazon has to abide by what publishers demand, and this is sometimes at odds with what users want,” she writes. “As a small startup we had no choice but to comply with their demand that we discontinue the feature that allow users to import and sync Kindle data in Findings.”

I’ve asked Amazon for a comment, but does it makes sense that this decision would be driven by book publishers? They are already able to restrict Kindle highlighting: they have the ability to limit the amount of content clipped from an ebook (and Evernote users who wanted to save their highlights have been blocked from saving too much content). It makes sense that piracy-fearing publishers don’t want users to “clip” too much of a book and share it. Scanning the content shared on Findings, though, it’s clear that most users aren’t sharing more than a paragraph of text.

Amazon itself lets readers share their highlights and clippings through a feature called “Public Notes,” and it’s possible the company is cracking down on competing services like Findings in an effort to promote its own service. Considering that “Public Notes” is relatively under the radar, that seems somewhat unlikely. But the new Sony Reader lets users share passages through Evernote, and Amazon may be planning to make its own sharing features more robust.

Finally, Amazon simply may not want third-party apps accessing Kindle highlights. If so, we should expect to see services like Evernote cutting off that functionality soon.

One of the main things the new Digg seems to be missing is any sense of community, or even comments. The items on the site have reactions attached to them that come from Facebook and Twitter, but that’s it — no ability for users to post a comment the way they could on Digg. For anyone who recalls the original, this is a significant loss: before Reddit or Hacker News built a community around online discussion, and before Twitter popularized the sharing of links to interesting news, there was Digg. And for better or worse (depending on your perspective) the Digg community was a big part of what made the site fascinating.

Pros: The new Digg is clean-looking, fast and mobile

It’s tough to be too hard on the new Digg team about missing features, since they managed to rebuild the entire site in just six weeks. According to Betaworks founder John Borthwick — who is now also the CEO of Digg — the old code base and design of the site was just too expensive to operate, and so the company decided it had to re-engineer the whole network. What it launched on Tuesday is very different from what Digg used to look like, with its long pages of links and comments: the new version is very clean-looking from a design perspective (although that too has its critics), and it makes good use of images.

At least one person has called it a Pinterest for news, which is a pretty apt description so far. And while a number of critics have complained that the new Digg requires users to log in with Facebook, at least the site is trying to take advantge of the network effects of other sharing services. The new Digg has also launched an iPhone app that is just as stripped down as the web version, and moves with impressive speed — a smart choice at a time when an increasing amount of content is being consumed on mobile devices.

That said, however, there are a number of other players targeting the same sandbox that Digg wants to play in, whether it’s the Twitter network itself — with its increasingly curation-driven approach to the content that it distributes — or newcomers like Prismatic, which like the new Digg uses a variety of algorithms based on sharing activity in your social graph to determine what links to show you (Digg also has human editors or curators selecting content as well).

Can Digg create a new community around news?

News.me, the Betaworks startup that merged with Digg after the incubator bought the company, was also working on a news-sharing service that started out as an iPad app — originally created by two developers working for the New York Times — and morphed into an iPhone app that founder Jake Levine said he hoped would become like an Instagram for news. Given that building a community around news sharing was one of the things Levine said he was trying to do, there is hope that later versions of Digg might contain more social elements, but for now it is little more than a bulletin board with news items pinned to it.

There’s no question that we need smart aggregators in order to help us filter the vast amounts of information that are coming at us every day online, and the ones that interest me the most (and others such as Clay Shirky, a big fan of News.me and its curated email briefing) are networks or services that take advantage of the connections I’ve made through my social graph and use that to help show me information I am more likely to be interested in. Digg can do that, but what makes it any better than anyone else out there doing the same thing? The power of its algorithms?

In a blog post, Digg says that “experimenting with new commenting features” is one of the things on its to-do list as it develops the service over the coming months, but that’s a long way from building — or even re-engaging with — a community (many of whom have long since left to join Reddit in any case). That’s the part that is arguably the most valuable of all, but it’s also the hardest thing to build.

Post and thumbnail images courtesy of Flickr user Montecruz Foto

Updated: Maybe it was the BusinessWeek cover that sealed Digg’s fate. When the social-sharing site was near the height of its popularity in 2006, the business magazine put founder Kevin Rose on the cover with the caption: “How this kid made $60 million in 18 months.” That was the estimated value of the site at the time — based on some suspiciously bubble-like math — but it was also the point at which Digg started to decline, slowly at first and then more rapidly, followed by some disastrous redesigns and the departure of its founder. Today, New York-based incubator Betaworks announced that it has acquired the remaining assets of the company, and according to a report in the Wall Street Journal, the purchase price was just $500,000.

Update: While Betaworks may have paid $500,000 in cash for what was left of Digg, the total value of the company’s assets at the end of its life is apparently closer to $20 million, according to a number of reports. TechCrunch says that the Washington Post paid $12 million to acquire most of the development team, and LinkedIn paid between $3.75 million and $4 million for patents that the company had on some of its social features. The New York Times has also reported that part of the Betaworks deal was “single-digit millions” worth of equity in the incubator. Meanwhile, in an interview with the WSJ, Rose said Digg failed because “social media grew up,” and the Digg founder has also written about the acquisition on his Google+ page.

Betaworks, the incubator behind companies such as Bitly and Chartbeat, said in a blog post that it plans to merge the remaining assets of Digg with News.me — a Betaworks startup whose focus is news discovery, and was recently spun off as a separate entity under CEO Jake Levine. The core of Digg’s development team left in May to join WaPo Labs, the research arm of the Washington Post, and according to the Wall Street Journal report, CEO Matt Williams (who took over from Kevin Rose in 2010) will join Andreessen Horowitz as an entrepreneur-in-residence. Said the Betaworks post:

Digg is one of the great internet brands, and it has meant a great deal to millions of users over the years. It was a pioneer in community-driven news. We are turning Digg back into a startup… 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.

In many ways, Digg was eclipsed by the whole social-networking phenomenon, which was just starting to build into a massive wave when Kevin Rose appeared on the BusinessWeek cover. Facebook had recently broken out of its university-only mode, and Twitter had begun to fulfill much of the link-sharing purpose that Digg and other communities such as Reddit originally had. In 2010, Digg launched an ambitious redesign aimed at adding more social and Twitter-style features, and it also added special tools for publishers in an attempt to get mainstream media sites to push their stories to Digg first. But those changes irritated most of the site’s hardcore users, and they turned on it.

An attempt to reinvent both Digg and News.me

The merger marks an attempt to reinvent News.me as well: the Betaworks startup — which recently launched a mobile app that it hoped would become “an Instagram for news” — was originally created as a partnership between Betaworks and developers at the New York Times, and later bought by Betaworks. Like Digg, the idea behind News.me was to use social behavior around link-sharing (as well as algorithms developed by Bitly to track the popularity of shortened links being shared on Twitter and elsewhere) to filter the news for users in a more social way. But the iPad app didn’t get much traction and the service has lost ground to other solutions such as Flipboard and Zite.

Digg’s history of more than 350 million “diggs” and 28 million story submissions, combined with the knowledge that Bitly has from its database of shared links, could help power a new recommendation engine within News.me — or at least that seems to be the hope. In a comment that Matt Williams posted to the Digg blog, Kevin Rose said of Borthwick:

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.

Rose left the site last year to start his own startup incubator called Milk, which released a single mobile-sharing app called Oink and then abruptly closed its doors, and Rose later joined Google’s financing arm, Google Ventures. Matt Williams tried to fix what was left of Digg, and there were reports that traffic had started to recover somewhat (it still has 7 million unique visitors a month), but then the entire development team left en masse to join WaPo Labs and it became obvious that Digg was no more.

At one point, Digg reportedly got an acquisition offer from Google of $200 million, but turned it down to focus on building the site as a standalone service. During its heyday — when websites used to talk about “the Digg effect” taking down their servers with a rush of traffic — it raised a total of $45 million in financing from venture investors such as LinkedIn founder Reid Hoffman and Andreessen Horowitz, all of whom will presumbly write the investment off as a difficult lesson in the vagaries of the social web.

Post and thumbnail images courtesy of Flickr users Ed Kohler and Giuseppe Bognanni

The recent redesign was meant to help it achieve that aim. My colleague Ryan Kim explained at the time: “The service has already helped people save 25 billion links since its launch in 2008 and is used daily to share almost 100 million links. The additions are part of a larger effort to make Bitly a hub for saving and sharing content on the Web.”

Bitly says daily registrations increased by 300 percent after the May 29th rollout. But the changes also showed how difficult it would be to leave the old bit.ly behind; after a lot of complaints by people who rely on the link shortening service, the easy way to shorten went back on the front page.

The company said the new funding “enables us to focus on growing the team to expand our social web products.” The Verge reported in May that bitly was out raising money and put the amount at $20 million.

Update: Caught up with bitly CEO Peter Stern after the announcement and he filled me in on a few details. (I added some of them to the section on funding above.) Contrary to the earlier report that bitly was out to raise $20 million, Stern said they started out much lower and actually had to increase the round to $15 million. He also said that Vinod Khosla will be joining the bitly board.

Bitly currently has about 40 employees, which, Stern added, makes it “significantly understaffed given what we’re trying to accomplish.” He wouldn’t pinpoint how many employees he hopes to add but said most of the growth would be on the technical side. Eight jobs are listed on the site now.

Among the products in the pipeline: some consumer variations on the enterprise analytics package bitly started selling three quarters ago.

When I asked how bitly was going to move from being perceived as a link-shortening service to a social discovery and sharing hub, Stern replied: “I think bitly is already built into the social fabric of sharing for millions of people.” He mentioned being stopped on the street when people recognize the pufferfish logo as an example of the awareness that is out there. But this isn’t just about bitly brand awareness — a lot of people don’t even know when they’re using bitly, which has an open API powers more than 10,000 custom short urls.

Is that enough to make this kind of investment pay off? A lot will depend on the kind of products that come out and whether they can be executed without singeing that social fabric.

Om Malik interviews John Borthwick, founder and CEO, Betaworks.

Betaworks CEO John Borthwick’s advicefor the media industry: think about producing “information” — not “content.”

Why? “Content is very much about the package, very much about the container”, Borthwick said during a Q&A with GigaOM founder Om Malik at our recent paidContent 2012 conference.

The moment you start thinking about it as information, I think people start thinking about it differently, they think less about the container and the structure and a little bit more about the users.

That’s especially important as the concept of “container” changes with the increase in realtime data and sharing across platforms.

The pair also talked about how to use that data (Betaworks has started both Bitly and Chartbeat); how Facebook isn’t making the best use of its data for advertising and the need to break the CPM ad model; why Apple’s app store and Google Play don’t work; and a lot more packed into the embedded video below:

Jim Bankoff, Chairman and CEO, Vox Media

Data helps destroy containers, and that’s a good thing. Data creates new content and information experiences and helps bring an end to the notion of content silos, Betaworks’ John Borthwick said: “The moment you start thinking about it as information, you start to think less about the package and more about the users.” Forrester’s James McQuivey pointed out that it’s not just a “tablet or iPad world,” but an “everything world” — and millions of people are consuming content not on iPads or e-readers but on gaming systems like the Xbox 360.

Digital storytelling is a native art. Stories on the Internet are not a new form of magazine or newspaper stories, but a medium in their own right — just like radio or TV. Publishers should develop their platforms accordingly rather than just repurposing other print vehicles. When Wenner Media released Us Weekly on iPad for the first time, it figured out a way to enable the “passalong” that’s so popular with the magazine’s print edition. As Vox Media CEO Jim Bankoff told us, George Lucas had to build a new story-telling platform called Lucasfilm so that he could tell the story of “Star Wars.” And don’t say blogging is dead: “That’s like saying creativity is dead, or personal expression is dead,” said WordPress founder Matt Mullenweg.

Om Malik interviews John Borthwick, founder and CEO, Betaworks.

Not all “media” are created equal. Union Square’s Fred Wilson and Betaworks’ John Borthwick gave a rude awakening to Big Media executives, urging them to give up control of their content — and even to stop calling it “content.” But declaring new digital networks victors over somewhat different traditional print and broadcast operators after simply labelling each “media” can sometimes seem counterproductive and insufficient: What’s being created now are entirely new kinds of information vehicles. The industry is truly “at the crossroads” suggested by the paidContent 2012 conference’s subtitle– but technologists and information producers may now be heading in different directions, as well as speaking different languages.

Publishers have to sell their brands directly to consumers. “Publishing companies need to understand that the thing [companies] like Amazon, Barnes & Noble and other retailers really respect is a brand,” Pottermore CEO Charlie Redmayne said in an explanation of why those companies agreed to send customers directly to the Pottermore site to buy e-books. “If we’ve demonstrated anything, it’s the power of a brand,” he said, noting that over half of Pottermore’s e-book sales result from readers coming directly to the site instead of being referred there by the retailers. Not every brand is Harry Potter — but “need to understand that their role in the future is creating these brands,” Redmayne said.

It’s time to toss CPM as a yardstick for online advertising success. How can Facebook be so inept at advertising? Because it’s handing advertisers a sledgehammer not a scalpel. Betaworks’ Borthwick and GigaOM’s Om Malik say it’s time to discard old-fashioned display ads as the basic unit of online ad success. Instead, it’s time for advertisers to adapt their ads to the evolving nature of the internet itself. That means forgetting about CPMs and focusing on data and social dynamics. On a broader level, it means re-imagining basic precepts of advertising and product discovery in a world where Web pages are being eclipsed by new types of online discovery and interaction.

If you didn’t make it to the TimesCenter yesterday, you’ll find video of all yesterday’s panels here (registration required). And let us know your takeaways from the day in the comments.