Is Digg facing a takeover?

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This isn't the first time that Digg has been linked with a potential takeover deal of course, as across the last year or two, its name has quietly popped up in dispatches as a potential target on more than once occasion. Notably after key social networking acquisitions - Google/YouTube and News International/MySpace, for instance - have the rumours been fuelled.

And it's believed that beyond mere rumours, some work has been done in the past on potential deals, only for matters to end without a resolution. Yahoo!, for instance, was linked with a potential purchase last year, only to eventually snap up rival Del.icio.us instead. News International too was linked with Digg back in the Autumn of 2006, although again this came to nothing.

Given the intensity of the current reporting around the Digg.com rumour, however, there seems more fuel than we're used to seeing surrounding the story. The Washington Post angle in particular seems to have credence, not least because it is an organisation with the financial muscle to broker such a deal (perhaps more so than its New York rival). And it's clear that a media company, rather than a technology firm, is going to be more the more logical and likely home for Digg in the future. The Washington Post simply fits the bill.

Our prediction here is that perhaps the time for a Digg deal is approaching. As with other similar services we've explored in our Vulnerable To Takeover features, it's in an enviable position where there's no obvious need or pressure to sell up short of maximising market valuation.

But Digg is nonetheless on the shopping lists of some companies right now, and with the four founders likely to be transformed into millionaires many times over within three years of starting Digg, a deal here is surely a case of when rather than if. Don't be surprised to hear an announcement before the end of 2007.

Whether you agree or not, would you be kind enough to Digg the story?

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