Digg Hunts For News Corp Treasure

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The popular user-contributed news site has been chatting with News Corp about the potential for being acquired, but the media power may not want to dig as deeply into its pockets as Digg would like.

A price tag of at least $150 million may have sent Fox Interactive Media president Ross Levinsohn punching the trap door button to drop Digg’s Kevin Rose out of his office. Although Levinsohn’s Los Angeles-based division of News Corp picked up MySpace for $580 million, TechCrunch reported several sources claimed the company balked at Digg’s request.

With Levinsohn and company unwilling to make a nine-digit offer to Digg, TechCrunch noted that Digg may turn to another round of venture capital funding should they not find a buyer before the end of this week. News Corp may have been turned off by Digg’s traffic, according to TechCrunch’s Michael Arrington:

One point of controversy was around Digg’s claim of 20 million unique monthly visitors and steep monthly growth, whereas the Comscore’s most recent September report shows only 1.3 million monthly unique visitors and flat growth since April (see chart below). Comscore is notoriously flaky, and these numbers are for U.S. households only. Comscore is almost certainly significantly under-reporting Digg traffic.

David Cancel of click-sharing site Compete commented on the TechCrunch post that Compete’s Snapshot of Digg traffic showed many more US unique visitors than comScore. “Compete is showing US uniques at over 2.26 million with a nice spike in the last month,” Cancel wrote.

Loren Baker at Search Engine Journal considered the possibilities for Digg if it were acquired by a major Internet player like Google or Yahoo:

If Fox Interactive were to acquire Digg and somehow spin it into a MySpace partnered news site (no, not Fox News) which is monetized in part by Google AdSense wouldn’t it make much more sense for Google to acquire the company, bring Kevin Rose into Google and have Digg and YouTube sit right across from each other in some really groovy Google 2.0 IncubatorPlex?

Perhaps the real answer would be which company would lead to less exodus from Digg.com once the company is acquired?

Or would Yahoo buy the company out, merge it with del.icio.us & flickr somehow, and have one social media monster under their belts?

Digg has been expanding outside of its original tech-focused niche by adding new categories. Visitors can contribute links to stories on sports, entertainment, science, business, videos, and gaming. Only the business section comes close to the number of stories available on the tech section.

Kevin Rose and company may want to rethink their position on Digg’s pricing. Google paid a premium price for YouTube because of its traffic and stickiness. But other acquisitions made by Google and Yahoo have probably been in the $20 million to $30 million range. Digg should be worth a little more for its traffic, but maybe not $150 million.


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David Utter is a staff writer for WebProNews covering technology and business.

Digg Hunts For News Corp Treasure
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