TechCrunch announced a rumor that Google is in the late stages of purchasing Digg for $200 million. Digg.com used to be a great site to get latest and most unique tech news. Many users who used to frequent sites like Slashdot or TheInquirer.net began to use Digg since there were more “interesting” stories and people could quickly submit something they came across to others without having to go through an entire editorial process.
This editorial process, which, for the most part needed to be done by human editors was good and bad. The bad part was that a small group of editors can’t work nearly as fast as algorithms and thousands of people voting for stories. The good part is that editors can select relevant and useful stories for their users while maintaining a level of professionalism and accuracy in the reporting (this may exclude some major news networks).
People complain that newspapers don’t show a complete picture because the editors hold back stories or only will post stories skewed to their interests. Well, if you’ve been on Digg before it became a social marketing tool, you would’ve noticed the changes the site has gone through which reveals the cracks in social news sites.
Stories making it to the front page, or “the masses”, are mostly submitted by the same people. As Digg has expanded, so has their range of stories which now include Top 10 Lists, Shocking News You Have to Read, news that’s skewed to certain people’s point of view (just like the bigger sources) and stories from marketers who are gaming the system. Digg has gone from a specialized tech news site to a National Enquirer or Fox-like sensationalized style.
Yet, Google still seems to show love to Digg by quickly indexing their stories and showing them higher in search results. They now want to pay $200 million for the site and incorporate their technology into their other properties. While there are some benefits to gaining the user base and the technology, Digg has only signed a 3 year, $100 million ad deal with Microsoft, which will end if Google buys Digg. With Microsoft often over paying for deals with social sites, and with a slowing economy, it is safe to assume that the ad space probably isn’t worth that much. Add to the fact that Microsoft seemingly took Digg away from Google with ease may show that Google didn’t think a $100 million ad deal was worth it either. So what is creating this $200 million price tag?
If Google wants Digg for their technology, then spending $200 million would probably suffice to create their own, more powerful algorithm. If they want Digg for their user base, it still seems like a steep price to pay for a group that is probably the most annoyed by any sort of online advertising and may end up leaving as Digg is brought to the masses.
If a sale is made, Digg it’s user base will most likely increase, but the overall quality of what made Digg, Digg, will decrease even more. It looks like this may become another acquisition for google that goes nowhere before it even happens. The only positive aspect of the deal is that $200 million is petty cash for Google so if it doesn’t succeed, it’s not a huge deal.
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