Google’s on and off negotiations with Digg have been back on in a big way for the last six weeks, we’ve heard from multiple sources inside and outside of Google. The two companies have reportedly signed a letter of intent and are close to a deal that will bring Digg under the Google News property. The acquisition price is in the $200 million range, says one source.
We first wrote about the Google-Digg negotiations in March. Despite a vigorous denial by Digg CEO Jay Adelson the negotiations continued, although Google’s Marissa Mayer reportedly cooled on the company for a period of time.
The companies are now in final negotiations according to our sources, although it could be a couple of weeks before it closes. And while the major deal points have been agreed on, the acquisition could still fall apart. Microsoft, which was previously interested in the company, may be willing to step back in at a much lower price.
Most of Digg’s revenue comes from a three year ad deal with Microsoft, which will be terminated on a sale to Google. Digg has raised $11.3 million in venture capital.
Meanwhile, Google’s fascination with the Digg voting concept continues.
Is it real this time? If so good for the Digg crew!
there’s a solid chance that it is.
I call your buff.
Your always posting stories about digg buyout and never give clear evidence to where you got your information from and something clear to backup the story. It’s always whispers of someone passing information along and they don’t necessary have to be real
I probably have an idea where this speculation started:
If you tuned into Twit Live this weekend Leo Laporte was talking to Colleen about digg being bought out and how Kevin was going to be very rich. There a possible this where the Chinese whisper started
This was just conversation speculation and couple of days later Techcrunch has somehow made a story out of the speculation as gone around the internet.
Techcrunch need to give us some hard evidence or fact of a digg buyout. Cause everytime you don’t it make you guys look like fools or becoming Perez Hilton for tech news
I have to agree with the other comment: How the hell are we supposed to believe this?
If I’m reading it right this post goes something like this.
We’ve said this before and it hasn’t happened.
But this time it’s going to happen.
It won’t happen for a few weeks.
And just in case: The whole thing might not happen (you know how these things work, nudge, nudge, wink wink).
I’m not saying it’s not true: but why even publish this if it’s all just rumor and you have nothing but rumor (not even the name of who gave you this rumor) to back it?
I.m im agreement good for the digg crew!
Let’s see what Kevin does with Revision3 now …
What happened to this rumor? No news??
This is a problem with the exponential scale, such as digg is probably only logarithmic or geometric, as the user is not automatically notified when new elements may be of interest to it, are dug from others in the network, is a slow and gradual process.
Good for Digg Crew for sure. But isn’t Google becoming the next Microsoft? Isn’t it walking the same route?
Congrats to Digg! Way to go Kevin.
Here is a way to save $100.000.000.
Spend $10k to build a digg clone.
Spend $99,999,990 on marketing – just give out cash to users!
Calacanis tried doing that with netscape.com. It didn’t work.
LOL… uh yeah, but that’s because he was way too cocky about it.
In a interview with Calacanis, he was questioned about Netscape being a Digg ripoff. He said that “people who said I ripped off Digg are people who are 12-year old fanboys of Digg. It’s evolution. … I don’t back down to people.”
Like netscape.com? That turned out well.
I don’t see how Digg is worth $200mln. Digg concept is easily re-creatable, there’s already a bunch of clones out there.
its an advertising platform. the users are there – google wants to cash in on their eyes.
then why would they need to sell — oh cuz Digg doesn’t know how to monetize their traffic. The best they could do is sell inventory to MSFT
And none of those clones have even a fraction of Digg’s traffic or user base. Digg’s value is not in it’s software.
Actually, I think I heard/read somewhere that Digg Clone Yahoo Buzz has a greater user base and more traffic than Digg simply because any yahoo user can use it.
@will
It has more traffic, because the news get on the Yahoo start page, which of course has more traffic than Digg …
Traffic… it’s ranked #23 on compete.com with almost 24 million US uniques a month.
Like netscape.com? That turned out well.
building a site like that is technically easy.
Scale it to millions of users it not.
Grow it from 0 to millions of users, even harder.
so i think $200 million is well-justified
great job! Kevin!
I’ll have to disagree, scaling the dig site is pretty simple it is not the same architectural structure as say a twitter, that is a much tougher nut to crack at scale because of the way that tweets can propagate in real time across the twitscape (my term) *grin* necessitating the ability to handle sudden spurts of peak activity depending on how many people are following the original tweet. This is an exponential scale problem where as digg is probably just logarithmic or geometric since users don’t automatically get notifications when new items they may be interested in are dug by others on the network that is a slow and incremental process.
The valuation they are getting is due to the eyes they have on their site and they had that by being first mover in the space. It’s good to be a pioneer!
Takes advertising away from Microsoft and puts it under control of Google. Don’t be evil.
Still pretty cheap compared to how much some of the other sites have gone for recently … especially considering the traffic, site name and name recognition …
DW
Yes, but those Digg clones don’t get traffic. People already associate social news voting with Digg. There are a million Pliggs out there but none of them attract any eyeballs (money).
Well — that would be the end of digg as we know it. Digg technology would be integrated in google news and digg itself will end up as a side show to voting algorithms in search and news — which is probably what the digg/reddit revolution was all about anyways…
And that would be a bad thing? Anything that would make the low class of Digg’s comments go away (take Reddit with you!) can’t be terrible.
I doubt that. I believe that Digg, as we know it now, will remain for the most part.
Boogie: Its not about the product, its about the community. Of course they could make their own, but why do that when you can just buy a product that already gets millions of views?
That, and it would be just slightly crazy to compete with something that’s already got a structured base and is well-known throughout the net as Digg. Even if Google did launch a strong competitor, there would be some Diggers that simply wouldn’t want to switch over.
Business Week had him on the cover two years ago estimating he still held 1/3 of the company. I think they’ve raised money since then though.
What a waste of money. Stopped using digg a long time ago when digg started favoring certain power users. Long gone are the times when digg was a user generated news site.
Too much gaming goes on now.
Exactly, a few power users can game the results making Digg less palatable.
At the same time the community is huge and passionate
Software is reproducible but I have learned over the years that a good copy can not be made without passion and talent. Surprisingly there is a big lack of passionate talented people.
I am still surprised that NO ONE has created music software as good as the iPod. No one is even close.
Do you mean iTunes?
It is all about the algorithsms, guys
please
with all phd guys at google
they wouldnt need to copy digg algorithm
@Boogie – The community has value, but the platform also has value. It may seem simple, and building a digg clone for little traffic isn’t hard, but I suspect that building a digg clone that scales and that has the anti-gaming algorithms that digg has developed over the years wouldn’t be trivial. $200m does seem steep, though.
you must have miss article that says 1/3 of digg front page are control by 20 members
And the other 2/3 are from digg-swapping arrangements between members.
The only thing digg’s got in it’s favour is the traffic it gets from Google that passes through digg on their way to destination sites, and at some point Google’s likely to realise they’re pretty useless as search results and place less significance on them.
Why would Google pay $200m for a forum with a relatively small community (maybe 50,000 – 100,000 users) that is only highly-trafficked while Google allows them to be?
Actually its 1/3 of Digg’s front page is controlled by 10 members
Soon there’ll be nothing that Google *doesn’t* own.
what is this? the digg drog outs section lol
Do you have any sources from Digg? Or are they just from google so far?
Congratulations Kevin Rose. You won at teh internet and beat Comcast at their own sick game.
TL – http://offur.co...rThanTechCrunch
Digg is terrible. The majority of the site is populated with bent science and horribly slanted liberal/socialist views…
Agreed – what’s Google thinking? Has anyone from Google actually spent time on Digg.com?
google idiots
G needs to do something with all the FCF they generate…Digg is a good use of capital.
don’t know how I feel about this one. Sure, we all love seeing the young entrepreneur get a pay day, and no one deserves a payday like Kevin Rose, but I can’t help but think that Digg, a true web 2.0 gem, shouldn’t go into the hands of such a big player.
Digg is like the New York Times for my generation, and though google is a much better suitor than murdoch, such corporate governance always introduces an susceptibility to bias.
wish Kevin would hold on to this one.
The new york times of Apple top 10 lists.
Remember when Commander Taco was worth $90 million. lol
The new york times of our day? what are you a fuckin idiot?
no – this is just the fuckin idiot generation.
finally rose cashes out, congrats.
hows his equity?
The Big Big deals…
Didd’s magic is it’s independence – it will be commercialized now………………….
is this the main reason Marrissa was dating Kevin?
This is big. It would be a fantastic acquisition for Google. If this goes through it’ll be interesting to see how they integrate a digg-like feature into their search results…
Jeff
http://www.read...ex.php?RTA=web2
Good Work Kev, you the man.
Sooo…what’s $200,000,000.00 divided by 1/3 minus taxes?
enough money to say your somewhat rich. LOL.
almost enough for a house in san francisco.
you mean an outhouse ?
I love digg! and it would be more interesting to see the new layout of google-digg news.
It is only Monopoly money anyway….
Good on you Kevin rose. Replicating it would be just like replicating twitter,we all know twitter is crap, but users flock back.there are a lot out there including pownce but Kevin uses twitter anyway. There are arcral figha out there, but there is something to be said for being first. For every user that leaves, two more take their place.
-jimi lee
http://www.indi...chattanooga.com
Congrats and good luck to Kevin Rose and team.
I was just thinking though, have any of you guys seen WALL-E? Google is the becoming the B&L company that was in that movie…. just think about it a little bit, they really are on their way to at least partially owning everything.
Wasn’t expecting this. Way to go Kevin and crew.
Again, this is pure speculation and yes, G wants D for the eyeballs and userbase and perhaps the algo and intellectual property (to a certain extent)…
not to mention the historical user data in the Digg server logs – perfect to add to the Google data mine… and ultratarget all of us.
This is so going to Digg’s front page.
Earlier guesses had placed this deal as high as $300 million. In a slower tech market, I’d guess that Rose and Adelson are ready to sell and get on with their lives. Any guess as to the number of patents Google would get if and when this goes through?
F it
I originally heard Jay was shopping Digg around for $200 -250 mill some time ago.
Damn I hope this doesn’t happen. I can’t imagine what Google wants to do with Digg, aside from advertise on it. If there’s some other reason I really just can’t see it. I really do hope that Google either has some other plan in store for Digg, for the better, or it’s going to fall apart.
Im telling ya dude, one day Google is going to take over the entire World! Its just a matter of time!
JT
http://www.FireMe.To/udi
As both a digg and Google user, I believe it is imperative that digg retains its autonomy if they are acquired. The digg brand cannot go away. It cannot be ‘Googleized’. It must remain as it is.
What is exciting is the integration of digg and Google News technology for social media. That’s something to look forward to, as it could redefine how we discover, read and share news.
Why is digg.com worth $200 million, but demand media worth north of 2 billion?
dumb, Google … very dumb
Only 200M? If 1B then sure, I’ll support Digg founders for caving in. But 200M is only a small change for Google.
No way, don’t sell out dudes! I’ll switch to a digg competitor if this happens. Google already owns too much of the Internet, not another one.
Ok this is Off Point but where is the techcrunch forum ??
wow, I’m amazed by this. Digg is so terrible these days, the news it gets is days behind competitors like Reddit or Hacker News, and the entire system is gamed and controlled by a small handful of members.
The only thing I can think of that makes sense for this is Google just wants to take away another advertising morsel from Microsoft…
Good Eye Chris.
Can anybody say…Giggle?
not sure what the fascination is with Digg. I can go months without ever using the site.
As much as I’d like to see another AOL Time Warner, I doubt this will happen. Still, as one of many who has suffered at the hands of Digg’s arbitrary decision making (banning large, legitimate sites at the drop of a hat, with no recourse), I wouldn’t be sad to see a little order brought into the chaos.
Didn’t Kevin just recently state they were breaking even on $3M in revenues for this year? That kind of valuation is absurd given the timeline for any ROI.
I disagree, I think that given Google’s new “digg-like” search features, they’re paying for the IP at Digg, as noted above they’re paying for the anti-spam and other tools Digg uses to avoid people gaming the system.
In addition, Google is paying for the engineering talent at Digg. While I agree that the valuation is high based on assets and revenue, it’s certainly not high relative to other social media site’s valuations. For Google to integrate these features well, why not hire the experts. $200M is chump change for them to get that experience.
Are you kidding? Google has teams and teams of people who are a whole lot more experienced and equipped to deal with spam. Do you really think digg’s “a bunch of people reported this as spam so someone check it” approach confuses Google’s phd farms?
Regardless of how many PhDs they have, Google lacks the experience in this field. Why not hire those with pratical and working experience.
When Digg first started, the links and posts were fairly intelligent. Since they added more “mainstream” categories, you could practically see the IQ level of the Digg population drop. Right now, the quality of comments are just above those of YouTube. Coincidence?
This is like a nightmare. Google owning everything. We being puppets. I hope Digg doesn’t sell itself to Google.
I made a post about Google controlling the web: http://www.webr...l-the-web/Check that out.
To reiterate, this is great news if you hate Goggle. Google is certain to be tainted by the frivolous garbage identified as temporarily novel by the generation “I” lunatics that troll for Digg material. Google may as well invite Lucifer over for dinner.
Google stock <$100 HERE WE COME !!!
Are they dealing with Google directly, or is there someone/a firm handling it? I’m interested in researching site sales and the normal process for anything larger than “small”.
Google is certain to be tainted by the frivolous garbage identified as temporarily novel by the generation “I” lunatics that troll for Digg material. Google may as well invite the devil over for dinner.
Google stock <$100 HERE WE COME !!!