$300-million? I could Digg that

A great rumour from Valleywag, and one that actually makes some sense to me: Owen Thomas says he has heard that Digg is close to a deal to be acquired for about $300-million, but not by Google or Yahoo or one of the usual Web suspects — by a traditional media entity like the New York Times or the Washington Post. Implausible? I’m not so sure (Mike Arrington wishes Digg would just sell itself already).

kevin rose.jpgAs Owen notes, Digg recently signed a multi-year advertising deal with Microsoft for $100-million, and is likely worth close to $300-million on that basis alone (albeit at pretty nosebleed multiples of revenue, but hey — it’s no Facebook). But probably not to Google or Yahoo. How much traffic does it drive to those sites? Little or nothing.

To the New York Times or the Post, however, Digg could make a lot of sense. Maybe not $300-million worth of sense, you might argue — but still a lot. To a large number of younger, Web-savvy users, Digg is their front page. And yes, it’s still largely focused on technology, but so what? The NYT has already shown that it’s willing to get more “social media”-friendly with its BlogRunner purchase and integration.

As a commenter on the Valleywag post notes, Digg competitor Reddit was bought by Conde Nast last year and it has apparently continued to thrive — in fact, it drives several times more traffic to my blog than Digg does. Meanwhile, Allen Stern over at Centernetworks has some theories about why Digg might be ready to sell.

According to Compete, traffic at Digg has skyrocketed over the past year — to 18 million uniques a month from 3 million, to 51 million vists from 4 million, and to 200 million pageviews from 10 million. Not bad.


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