Does Kevin Rose, Digg's co-founder pictured to the right, have a reason to smile? Well, even if the news broken by TechCrunch that his Web 2.0 news site has been approached by News Corp. isn't true, he's still got plenty to be happy about.

According to Michael Arrington, when rumors of an upcoming series B round of funding for Digg started circulating, News Corp. opened negotiations. The price: more than $150 million. Arrington doesn't think News Corp. or anyone else for that matter, is going to meet that price at this point. He points to questions about Digg's traffic numbers and a suspect Comscore report.

If a sale doesn't happen, Arrington believes Digg will go ahead with a $5 million series B round of funding, possibly from Greylock Partners. The question that needs to be answered here is what the true reaction to Google's $1.65 billion purchase of YouTube is. If that deal makes the other Web giants queasy, Digg will probably go through with the funding. But, if heads rolled when YouTube fell into Google's hands, especially when Yahoo! reportedly could've had YouTube, then Kevin Rose could be moving up a few tax brackets very soon. Bubble or no bubble, there are very few Web 2.0 giants left standing at this point, and Digg has an active community and plenty of traffic. — Brian Ward

Technorati tags: digg, web 2.0, news corp.