Digital Journal — It’s the biggest rumour circulating through the tech industry: Is social bookmarking site Digg.com up for sale?
According to respected blog TechCrunch, the Digg team has been in acquisition discussions with a number of companies, including News Corp. (who bought MySpace for $580 million). TechCrunch reports that “no formal written offers for Digg were tabled, sources say, because Digg’s minimum sell price was at least $150 million.”
One stumbling block in the talks was Digg’s claim of 20 million unique monthly visitors, while Comscore’s most recent report only shows 1.3 million unique monthly visitors. But to be fair, Comscore only looks at U.S. households so it is likely under-estimating Digg’s traffic.
Turning to Digg acquisition possibilities, there’s a few matters the possible suitor should consider. Digg doesn’t take advantage of its high traffic because the company is not making the kind of money investors expect. Ad revenue alone isn’t going to garner $150 million.
Then again, Digg has a strong community that is feverishly dedicated to the site and all things Kevin Rose (the company’s founder). The community may not be as strong as MySpace’s, but Digg is as social as it gets. Plus, there’s no ugly wallpaper or teeny-bopper songs playing in the background.
Digg needs to look for more funding until a white knight sweeps the company off its feet, in the same vein that Google did to YouTube. There won’t be any billion-dollar for-sale sign, though. Digg is powerful, but it’s still small potatoes compared to other Web 2.0 giants. What could elevate Digg past its niche position is an acquisition bound to give the company more stability and relevance in the already-crowded social-networking market.
