Google Says Nah To Digg Deal; Pulls out at Last minute

Google will not put Digg technology in Google News after it reportedly ended all negotiations to buy the social news website for USD 200 million (around GBP 100 million).

According to Michael Arrington from Techcrunch, there are two possible reasons why Google might have walked away from the deal; one related to the Digg's underlying/core technology and the strong personality of some of Digg's top men.

But the current economic conditions might also explain why Google suddenly pulled out of the deal as Digg's value could possibly go down in the forthcoming months.

Digg is now rumoured to be willing to go alone and has already hired Allen & Co, an investment bank which is specialised in getting technology firms fresh funds or potential suitors.

Digg is an interesting example of how social networking can turn out to be a successful endeavour without bringing in much revenue.

The social news website, which is expected to pull 280 million visitors in 2008, currently derives all of its revenue from a three-year advertising deal with Microsoft which was signed exactly one year ago and is rumoured to be worth worth tens of millions of dollars.