Techcrunch reports that Google is in the final round of negotiations to acquire Digg, the social news website that serves as one of the Internet's most important news aggregators. According to Techcrunch, representatives with both companies have signed letters of intent, and the reputed price will hover around $200 million. Techcrunch has been posting rumors about the sale for months, which Digg CEO Jay Adelson has faithfully and strenuously denied. Now, reporter Michael Arrington claims the deal could be announced in a matter of weeks. Oh, and that ad deal Digg has with Microsoft, the one that provides most of its revenue? Dead, if the buy goes through.
Motley Fool reporter Rick Munarriz thinks Google has plenty of incentive to snatch up the site. Although the Digg clone Yahoo Buzz generates more revenue, that's largely due to the synergy of placing Buzz headlines in the portal. Google could easily do the same thing, with more bang for the buck, and boast the main brand name for news aggregation in the process."Buying the leader saves the hassle of starting from scratch, while also turning a threat into an ally," Munarriz writes. "Spending $200 million or so, and then building on Digg's popularity by incorporating it into Google's own news aggregator page, would be child's play for a cash-rich player like Google."