Digg’s homepage

Google Drops Bid for Digg

July 28, 2008 11:11 AM
by Anne Szustek
Sources from the tech industry say that after meetings between top executives at the search engine and the social bookmarking Web site, there just “wasn’t a fit.”

30-Second Summary

After spending the past six weeks vying for the popular site that has users rank online news and multimedia, Google has abandoned its quest. The search engine notified Digg of its decision late Thursday or Friday, TechCrunch reports.

The two companies had been chatting off and on since March, when Digg initially rebuffed any takeover proposal. Google and Digg had reached the due diligence stage of negotiations, at which company’s technical and financial holdings face deep scrutiny.

“One source said that the issue was more personality driven, and that Google decided after spending more time with Digg’s top team that there just wasn’t a fit,” TechCrunch writes.

A takeover of Digg would have thrown the social bookmarking site into Google’s war chest of some 30 partial or total acquisitions. Among them: online video host YouTube, photo site Picasa, and Postini, which Salon calls “the software implementation of The Man.”

The Motley Fool contests that a purchase of Digg would have had a two-fold benefit. First, Google would have a news-sharing tool in its kit. It would also help Google buffer against Microsoft which has an advertising deal with Digg.

“If Microsoft—a company as notorious as the New York Yankees for overbidding in its acquisitions—isn’t raising a bidding card, Digg would be best served to shake hands with Google quickly,” The Motley Fool wrote before negotiations ended.

Even without acquiring Digg, Google already had some critics of its expensive shopping sprees wondering if the company is stretching itself too thin. Advertising executive Rishad Tobaccowala said in a 2006 New York Times article that the search engine was “overextended, like Napoleon opening up a Russian front. … I think they are a very amazing company that will take over nothing.”

Headline Link: ‘Google Walks Away from Digg Deal’

Background: Google and Digg in negotiations last week

Historical Context: Some of Google’s major acquisitions

Key Player: Digg

Opinion & Analysis: Google: savvy spender or shopaholic?


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