Google Walks Out On Digg Deal

In an article on Techcrunch entitled “Google Walks Away From Digg Deal“, dated July 26th of this year, it was reported by Michael Arrington that Google walked away from the Google/Digg Acquisition talks.   Michael stated:

“Two sources close to the companies suggested that some issue that came up during technical due diligence was to blame. 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.

Either way the deal appears to dead and can be added to the long list of failed Digg acquisition deals. And when a company is “left at the altar” other buyers are usually hesitant to step in”

According to Michael, “We’re hearing they’ll just push through with a new round of financing.“.

Prior to anyone “celebrating” or “mourning” the passing of this deal, it should be remembered that in the world of negotiations that nothing is final until it is finalized.  The parties involved may walk away from the table, only to return to negotiate at a later point in time.  It is possible that Google will end up buying Digg, after all is said and done, however it is obvious that Google sent a very strong message to the owners of Digg and it’s doubtful that Digg will ever get out of Google what they wanted in this last bout of negotiations.

What were the problems with Google buying Digg?  There are many comments out there about Digg and it’s drawbacks. The problems with acquiring Digg included just about anything from The Digg Mafia to Technical Issues.  The real problem with the Digg acquisition most likely boiled down to money, the almighty dollar.  Basically the question had to be answered as to whether the acquisition of the Digg Servers and site was worth the amount of money Digg was asking?

Earlier this month it has been reported that Google performed a Bucket Test that showed “a Digglike Interface“, it is reasonable to think that Google found out they don’t need Digg or it’s set up to compete after all - thus making the $200 Million figure wanted by Digg a price too high for something so easily and cheaply created.

Let’s wait a few weeks to see what happens, but it’s very possible that Digg’s grave is dugg.