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.
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.