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.
5 Comments
Archives
Google Walks Away From Digg Purchase
Read time: 1 minutes
Get a PDF Version of This
Article in Your Inbox
on
Yes Jerome, Google has their business strategies and proof of it lies in Google pudding itself. I think it is not money matters that deter Google from the Digg purchase but more out of monopoly worries. Whatever may be the reason, all these efforts have improved Digg’s face value.
Nice to see you here Jerome.
on
No one needs to teach Google business tactics; it’s just a ploy they employ to devalue the price of Digg. Even though they are developing their own social network site, they are still eyeing Digg and fully know its brand value. Google plans to pocket it at a lower price. Ofcourse, that is just my opinion.
on
It seems that Google has opened the doors to Microsoft by stepping back from the Digg deal. I do not think only money matters are what keeps Google from not purchasing Digg but fears of competitive concerns that will scorch the deal.
on
Google must surely be looking at the money. They know what Digg is worth. I feel that by quoting a high price for Digg and then withdrawing from the scene it is a method to belittle Digg’s importance among the public. It is a method to kill the competition. Google is just preparing the ground work before its own social website hits the market
on
Kevin can ‘digg’ another better or bad opportunity!!! Google’s change of mood may have great implications; mainly with online conglomerations. The new and emerging buzzword on the net. As the move has made a big noise someone else say Microsoft will catch a sniff of this. Sometimes out of monopollistic concerns Google has stayed away from this deal since their Yahoo pact is been closely scrutinized by US competition concerns and law authority.