There are more rumors about a Digg sale, and this time, they involve Google and Microsoft. According to the report, the investment bank Allen & Co has been floating the idea to several media
companies. "We hear from a source very close to the deal that four companies are in heavy due diligence with Digg - two media/news companies, and two big Internet companies - Google and Microsoft,"
blogger Michael Arrington says. "And Google and Microsoft are on the verge of making their bids."
Apparently, the social news aggregator is prepared to accept less than the $300
million Allen & Co had been asking for it. The bid would more likely be in $200-$225 million range, which Digg would likely accept.
A Microsoft bid for Digg would be somewhat awkward considering that the software giant supplies advertising services for the social media upstart. In other words, Microsoft provides most of Digg's revenue and should thus have the inside line into just how much the company should be worth. A sale to anyone other than Microsoft would likely terminate that deal.