San Francisco-based startup Digg has been in recent acquisition discussions with a number of companies, including News Corp., according to multiple sources close to the negotiations. However, the company was unable to land an offer in the price range theyre looking for – at least $150 million – and will likely close a Series B round of financing instead.
It appears that rumors of the upcoming financing led News Corp. and possibly others to initiate acquisition discussions with Digg, and the discussions were subsequently opened up to other interested parties as well. No formal written offers for Digg were tabled, sources say, because Diggs minimum sell price was at least $150 million.
One point of controversy was around Diggs claim of 20 million unique monthly visitors and steep monthly growth, whereas the Comscores 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.
News Corp is owned by the media mogul, Rupert Murdoch, and is the sister company to MySpace which News Corp bought for a small fortune a little while ago. There is an interesting analysis of a possible purchase by News Corp at "Ramblings from the Marginalized" which also takes a look at who may benefit more from such a purchase.
At the moment this seems to be conjecture and possibly even fantasy but then again, so was the Google/YouTube deal when it first came up.