Online Innovation July 28th, 2008
Google announced today that it will not be pursuing the purchase of Digg. Google was well into its due diligence process and was rumoured to be purchasing the social networking site for the $200 million range.
Google made the announcement on Friday after. Rumours of the decision range from personality issues to Google finding issues in the financial side of the deal.
The implications of this decision on Digg are enormous. When a decision like this is made it can often give other prospective buyers red flags and devalue the original asking price.
Digg is a user driven social content website where users can upload content and vote on the content. It can then be pushed to the first page based upon the volume of “diggs.” Digg was founded in 2004 by founder Kevin Rose and now boasts an operational staff of about 60 people.
The decision has raised some eyebrows in the industry as it is thought that Google will now begin developing its own social content collaboration site. It is rumoured that Microsoft is still eyeing the social utility. Infact Microsoft immediately jumped in and announced a 3 year deal to display ads on the Digg network.
As for the status of Digg. It isn't the first time the company has rumoured to be purchased. This attempt will join a list of many others. Rose will get his windfall someday.
Google Walks Away From Digg PurchaseRead time: 1 minutes