Digg CEO Denies Acquisition Rumor, Possibly Over Pressure

Posted Mar 8, 2008

“Normally our policy is to not comment about things like this, but this morningâ??s rumors about a bidding war involving Google and Microsoft have created such a stir we feel compelled to tell you all directly that they are completely inaccurate,” stated Digg CEO, Jay Adelson.  “Sorry to burst any drama theories, but they arenâ??t true. We remain focused on improving Digg and rolling out great features”
Digg the Blog]

Yesterday, Mike Arrington wrote an article about how Google and Microsoft may be in talks for acquiring Digg.  The rivalry that Microsoft and Google have with each other is so intense that I would not be surprised if this rumor was true.  Google signed an exclusive advertisement deal with MySpace.  So Microsoft responded by doing the same for Facebook.  Google bought DoubleClick, an online advertising company for a couple billion.  Microsoft paid a lot more for aQuantive, also an online advertising company.  Microsoft also bought an exclusive advertisement deal with Digg and made a $44 billion offer to acquire Yahoo!  This made Google slightly jittery.

This is why I would not be shocked if Google is making a bid for Digg, especially since the company is a hot Internet property.  Digg is in the top 200 on Alexa.  They have a few million users.  They have a video program that complements the show called Diggnation (via Revision3.com).  Most importantly, Digg aggregates the best content on the Internet at the expense of their users’ time.  Digg users often bicker and complain when some of their power is taken away from them (Top Digger list, tweaked algorithms, administrative removal of stories, etc.).  But their users keep coming back for more.

To further promote the likelihood of the acquisition talks, Digg hired Allen & Co.  Digg was supposedly shopping for deals between $200-$300 million.  And Google is rumored to be willing to spend $200-$225 million according to TechCrunch.  Will Google make a bid?  If so, will Microsoft respond?  Stay tuned.  And you stay classy, P2 readers.