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We're not overly interested in giving too much play to a company that's apparently been up for sale for more than a year without finding a buyer, but it's fairly quiet otherwise, and if Digg Inc. can somehow wrangle $300 million out of someone that's certainly noteworthy. No one who is involved is talking much about a report that the social news Web site has hired Allen & Co. to shop it. An Allen & Co. representative told us the company does not discuss who its clients are, and Digg was equally as uncooperative. Industry sources aren't hearing much as well.
Nevertheless, the blogosphere is rife with talk about a potential deal. One of the more detailed pieces comes from the always-insightful Ashkan Karbasfrooshan at watchmojo.com, who goes through a list of possible buyers for Digg and concludes that Google Inc. is the most likely "winner," though perhaps not for the $300 million price tag that someone is floating. Karbasfrooshan discounts news organizations and marketers as potential buyers, while also eliminating News Corp., which has been rumored as an interested party.
Meanwhile, ValleyWag, throws out IAC/InterActiveCorp as a potential buyer, noting the Barry Diller-owned company previously kicked Digg's tires.
That leaves the Internet's usual suspects -- Microsoft Corp., Yahoo! Inc. and Google -- as most likely to pursue Digg. Naming those three companies is hardly going out on a limb these days, though Karbasfrooshan acknowledges as much. He takes Microsoft out of the running even though it currently has a partnership with Digg. He notes that MSNBC, which Microsoft co-owns with NBC, acquired a similar site, Newsvine.com, in October. Likewise, Yahoo! already owns del.ico.us, another social bookmarking site.
That leaves -- ta da! -- everyone's favorite deep pocketed Internet juggernaut, Google. Needing to expand its reach beyond search to help justify its monstrous market cap, acquiring Digg would add to Google's stable of properties that includes YouTube and blog-monitoring service Feedburner. It also hits back at Microsoft after it "won" the right to invest $240 million in Facebook.
Though $300 million still seems a bit pricey, if Digg can get a couple suitors involved it should be able to come close to that figure. - David Shabelman
See October 2006 post from Tech Confidential
See Dec. 17 report from VentureBeat
See Dec. 17 post from watchmojo.com
See Dec. 17 post from ValleyWag
