The Digg acquisition by Google negotiations were in full swing as of last Tuesday, had passed the term sheet stage and the two companies were in final negotiations in the $200 million range. But sometime this last week Google decided to walk from the deal.
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.
It seems that they will just push through with a new round of financing. Digg hired Allen & Co. to represent them in the sale.
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Digg is a very influential and busy site. It even has its own effect “the digg effect”, whereby articles appearing on the first page are known to cause less than robust servers to fall down for the weight of traffic.
Any feedback from you?