Once again, Digg was unable to be bought out by another company. Negotiations between it and Google ended, when the search giant backed out of the deal. Reasons for Google’s decision are still up to speculation, since an official press release has yet to be made.
TechCrunch first brought the acquisition to everyone’s attention back in March. Although Digg’s CEO Jay Adelson denied the whole thing, it seems they weren’t totally off the mark afterall. Weeks later, it reported that the acquisition was priced at around $200 million. That’s more than double what Digg was asking for two years ago.
However, last Thursday, Google decided it was time to back out. The two companies were in the middle of the “due diligence” stage of the deal, when Digg’s technical and financial statements are brought before Google for inspection.
Reasons for this change of heart are still unclear. Yet, according to some sources with TechCrunch, it maybe due to technical or personal reasons. After Google checked out Digg’s top team, it may have just decided that it simply wasn’t a good fit.
So now Digg is back to square one, trying to get someone to buy. They tried this before back in 2006. It was rumored that they were trying to sell themselves to Yahoo for around $20 million. By the end of the year, Digg was asking for $150 million and turning down offers around $100 million or less.
Don’t expect Digg to step up and admit it, though. It has denied time and time again that it has ever tried to sell the company. And why should ity, with 11.7 million unique visits and an excellent growth rate, according to Comscore, the business is booming. However, ask any company that entered negotiations with Digg and it’ll tell you that “Digg has tried, hard and persistently, to sell…”
In the mean time, Digg is gearing up for another round of financing. It has even hired Allen & Co to represent them.