Seems every Web company has its price these days -- apart from Yahoo -- following a rush of speculation suggesting that prominent socially-powered news aggregation service Digg is on the cusp of being snapped up by search behemoth Google Inc.
Rumours suggest Google is about to pay $200 million USD for Digg. Image: Night Star Romanus/Flickr.
At the head of those currently grinding away at the rumour mill is technology blog TechCrunch, which claims that Google and Digg have signed a letter of intent ahead of finalising a $200 million USD acquisition deal that is expected to result in Digg being incorporated directly into the existing Google News service.
The sudden wave of Net chatter started when images appeared online last week that gave the impression that Google was testing a voting system similar to the one utilised by Digg when aggregating its search results.
TechCrunch reveals that multiple unnamed sources positioned both inside and outside of Google have indicated the search specialist’s “on and off negotiations” with Digg have been “back on in a big way” over the last five or six weeks.
Reports suggest that both parties are currently moving through final negotiations and an official announcement could be forthcoming in a matter of weeks. However, it is also thought that software titan Microsoft Corp. could yet throw a fat-wallet spanner in the works by launching its own eleventh-hour purchase attempt.
Currently, the majority of Digg’s revenue emanates from a three-year advertising deal it has in place with Redmond-based Microsoft -- a deal that would expire should Digg give itself over to Google’s advances.
Microsoft would likely be keen to prevent Google from strengthening its already solid search-advertising lead through Digg, not least as Microsoft’s recent takeover bid for Internet pioneer Yahoo Inc. fell flat before Yahoo promptly rubbed salt into the festering wound by penning a lucrative search-advertising deal with Google.
Digg Inc. was launched in December of 2004 by young entrepreneur Kevin Rose, who first entered the public eye as a presenter on TechTV’s popular show The Screen Savers, which is now more widely known as Attack of the Show on G4 TV. Other online start-ups co-founding by Rose (31), include Revision3 and Pownce.
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