Digg, once the darling of start-up world, has sold its brand and its Web site to the New York-based technology company Betaworks. The deal closes the final chapter on the story of Digg’s meteoric rise and ultimate decline.

In a blog post announcing the deal, Betaworks — which makes the popular app News.me — said it will be returning the company to its roots.

“We are turning Digg back into a startup,” read a post on Betaworks’ company blog. “Low budget, small team, fast cycles.”

The news was no surprise to anyone who’s been following Digg in recent years. Facing competition from sites such as Reddit, Digg has changed its site layout, its business model and, ultimately, sold off critical parts of its company.

In May, SocialCode, a social media advertising firm and subsidiary of The Washington Post Co., hired 15 engineering employees from Digg.

In a May interview, SocialCode chief executive Laura O’Shaughnessy said the engineers will be working on products that compile and analyze data from social networks to help companies glean more information about their customers. (O’Shaughnessy is the daughter of Post Chairman Donald E. Graham.)

Thursday’s post from Betaworks indicated that Digg’s core assets will be merged with News.me, meaning that the service will see a rebirth as a news discovery and sharing site. The company had most recently been focusing on the advertising side of social news with Digg Ads, which gave users the opportunity to promote or demote ads based on their relevance.

In a post of his own, Digg chief executive Matt Williams said that this is the “next stage in Digg’s future” and that Betaworks’ first Digg project will be to offer a cloud-based version of the service to complement News.me’s apps for iOS.

Betaworks founder John Borthwick will be taking over for Williams, who in turn will be joining Andreessen Horowitz as its Entrepreneur in Residence to work with other new startups.

A report from the Wall Street Journal said that Digg’s final price was $500,000, though Digg chief executive Matt Williams told All Things Digital that the real figure is “significantly larger.” Google had reportedly been courting Digg

According to the All Things D report, Digg still gets more than 16 million unique visitors per month, while its Facebook app has nearly one million monthly active users.

Related stories:

SocialCode hires 15 employees from Digg.com

Kevin Rose headed to Google