Google nabs Digg founder

Digg founder Kevin Rose (right) has joined Google to work on its social products, leaving Milk behind.

Digg founder Kevin Rose (right) has joined Google to work on its social products.

NEW YORK (CNNMoney) — One of Silicon Valley’s iconic entrepreneurs is going corporate. Google has scooped up Digg founder Kevin Rose and a number of his employees at Milk, the venture he created last year as a lab for experimenting with mobile app ideas.

Google product chief Bradley Horowitz confirmed the news on Google+ late Friday following rumors that Rose was in talks with Google (GOOG, Fortune 500) and Facebook. A source close to Milk said discussions with the two suitors — which turned into a bidding war — had been going on for a month.

Google paid as much as $15 million for the acquisition, according to TechCrunch. Google did not disclose the purchase price, and Rose did not respond to a request for comment.

Google essentially bought the team and tossed aside the actual company. Milk is shut down, and those not hired by Google were laid off, according to two people familiar with the deal. Surprisingly, the list of those cut includes Milk’s engineers — typically the team companies covet most when they acquire hot startups.

In Google’s case, it wanted Milk’s product and design talent. They’ll be put to work on Google’s social projects, especially Google+.

Rose dove in quick, using Google+ to broadcast news of his new gig. “I can’t wait to be a part of the amazing team that is shaping the future of the web,” he wrote.

Rose is best known for creating Digg, a content-sharing site that was once one of Silicon Valley’s most buzzed-about ventures. Its fast success led to Rose’s appearance on a now-infamous 2006 Business Week cover with the tagline: “How this kid made $60 million in 18 months.”

That number — based on a $200 million estimate of Digg’s worth at the time — never panned out. Digg’s star faded, and a series of rumored acquisitions went nowhere as the company’s CEO position turned into a game of musical chairs. Rose left the company last year to focus on Milk.

Google, Facebook, and Twitter have all been on acquisition sprees, scooping up startups to hire the entrepreneurs behind them. The actual products those entrepreneurs created are often an afterthought.

Just recently, Facebook acquired location sharing service Gowalla to bring in developers and designers to work on its Timeline feature. Three months later, Gowalla shut down. Earlier this month, Twitter bought micro-blogging platform Posterous to get hold of the company’s engineers and product managers. To top of page

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