Mike Arrington is reporting that Digg is soon to be acquired by Google or Microsoft. The new acquisition price? $200 – $225 million. As Caroline McCarthy points out, this is most likely rumors as $300 million rumors have been floated before. This would be a massive payout for the investors and shareholders given that they’ve invested less than $12 million in the business so far.
I seriously question the legitimacy of this given Google’s declining stock price and the audience currently attracted to the site. I could see D.C. based Mixx rapidly becoming a smart acquisition given the broader audience. In terms of technology, I’m not sure how this makes much sense. While Digg has created a scalable news site, this is not significantly unique. Also as Kevin Rose told Caroline McCarthy last week, “selling the company to a big buyer could get in the way of running it efficiently.”
I’m not quite sure what the long-term value in acquiring Digg is. Perhaps I’m completely misguided. What do you think?