You’ve Got 2 G’s, We’ve Got 2 O’s… It Just Wouldn’t Work Out

Posted Jul 26, 2008

Google Inc. (NASDAQ:GOOG) was rumored to have talks on and off with in acquiring Digg for roughly $200 million.  Marissa Meyer, Vice President of Product Management believed Digg would be able complement Google News.  Today is was reported that Google walked away from the deal.

Why did Google walk away?  A couple of TechCrunch sources reported that Google walked away during the technical due diligence stage or because they thought that the personalities of Digg’s board of directors wouldn’t align well with Google’s.  ValleyWag pointed out that Mayer announced this past Wednesday that Google News accounts for $100 million in Google’s revenue.  Therefore, Google News is doing fine either way, so why buy Digg?

Now that Google has turned down Digg, what will Kevin Rose do next?  Digg hired Allen & Co. to help with finding additional investments or finding a buyer.  Digg’s current revenue model is advertising.  Microsoft brokers the advertisements currently embedded on Digg.

Related Links:
1. TechCrunch
2. ValleyWag