Digg to raise funds after Google takeover talks collapse

Google has backed out of takeover talks with social news tool Digg, reports TechCrunch. The firms were reportedly in the final stages of negotiating a deal, valued at a rumoured USD200m. Digg is now expected to raise a Series C round of funding in place of an agreement, claims the report.

The news comes as Digg co-founder Kevin Rose denies, in an interview with TWiT.tv, that investment bank Allen & Company is in the process of selling the company. This was in response to recent acquisition rumours. Digg hired Allen & Co last December, reportedly to negotiate a sale with potential buyers. The firm will now help to raise VC funds says TechCrunch.

In November 2007, Valleywag claimed Digg was in talks to sell itself to a major media firm for between USD300m and USD400m. In March 2008, reports named Google and Microsoft as potential buyers, with rival bids expected to reach between USD200m and USD225m.

Digg has raised approximately USD11.3m to date, including two VC funding rounds in 2005 and 2006. The social news site, which lets users share articles and content from across the web, currently makes the majority of its money from a three-year display and contextual ad deal with Microsoft.

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Published by Reinout te Brake

Reinout is a games investor and strategic business consultant specializing in the games industry. Reinout established his credentials through his own successful investments, start-ups, consulting and (advisory) board positions that led through time to strong bonds with key stakeholders in this fast paced industry. He is known for his outstanding results in the gaming industry. He has worked with many game studios around the globe and is therefore well known in the international gaming industry. Check out his games podcast; https://www.game-consultant.com

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