DIGG or DICK, Google Wants To Buy It

24 Jul

Digg; a social voting news aggregator finally depreciating its value from a whopping $300 million to $200 million. Couple of months back Digg wanted a $300 million for its whole system and company but now they are finalizing the deal with Google for a lesser price.

What are the Digg’s owner strategy? While the major income came from the deal which sealed with Microsoft; do you think that Microsoft can afford to lose another gigantic investment after loosing Yahoo Search Advertising to Google? My humble opinion is, Kevin Rose is playing hard in the game of counter offer.

While Google is bidding for $200 millions, Kevin strategy is to get Microsoft to counter the offer. But how well is the strategy? Here is the nice and easy fact on how Digg suddenly became popular in 2005 :

In February of 2005, Paris Hilton’s cell phone was hacked. Images and phone numbers from the phone were posted online and it didn’t take long for a user to post the link on Digg. The site started to receive an enormous amount of traffic and it was then, Rose says, he saw “the power of breaking stories before anyone else.”

Wow..Thank you for Paris Hilton again. She should have been given credit in order to help the Digg get its value today.

Why Google Doesn’t Want To Build Their Own

This question being trigger around the IT world. Again, its a Principe of investment. Why Google needs to start a baby project and waiting it to grow while they can buy the whole entire market and segment. Or Google don’t know what is social voting system is? Kevin has to teach them from A to Z. LOL

Google Competitor

Competitors not competitor. Currently AOL stand handsomely with their Propeller while Yahoois still in the invitation mode for their Yahoo Buzz. If you see the statistic of traffics for the month of June, Yahoo Buzz brought 9.2 Million while Digg suffered a big decline to 6.2 Million.

Digg See Declined In Traffic

Yeah, this will happen when you are too strict for the content approving. When you easily banned people’s website, then you will be suffering the traffic and loyal visitors. Kevin Rose should have foreseen this problems and do not easily ban people’s site with the silly reason. Many other ways to counter the spam submission.

Who Will Win

Winning is not the big issues but if I am Kevin Rose, I would rather accept the deal with Google. Plan and launch the new projects while the big elephants (Google and Yahoo) fight among themselves. Kevin, you must come to Malaysia and drop by at Tioman Island, the best marine park in the world. Stay there for a couple of months and you will not regret it.

Remain Unknowned

July 28th, 2008 at 3:53 pm
1

i would not buy DIGG for an instant
why DIGG?

DIGG is suck man
Localize Structure

July 28th, 2008 at 4:02 pm
2

I hate Google because my page rank dropped !!
xBrain

July 30th, 2008 at 8:04 pm
3

The Google/Digg acquisition negotiations were in full swing as of last Tuesday, had passed the term sheet stage and the two companies were in final negotiations in the $200 million range. But sometime this last week Google decided to walk from the deal. Digg was notified on late Thursday or Friday.

Google was in the due diligence stage of the deal, where they peer deep into Diggâ€™s technology and financial statements. Most term sheets are non binding, so anything that gives the buyer pause can be used as an excuse to walk away - but generally the buyer already has a very good idea what they are getting well before the term sheet stage.

Two sources close to the companies suggested that some issue that came up during technical due diligence was to blame. One source said that the issue was more personality driven, and that Google decided after spending more time with Diggâ€™s top team that there just wasnâ€™t a fit.

Either way the deal appears to dead and can be added to the long list of failed Digg acquisition deals. And when a company is â€œleft at the altarâ€ other buyers are usually hesitant to step in.

So what will Digg do now? Weâ€™re hearing theyâ€™ll just push through with a new round of financing. Digg hired Allen & Co. to represent them in the sale, but the investment bank is just as good at closing massive venture financings, too (they represented both Slide and Ning in their recent a half billion dollar valuation financings).