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Digg turned down $100m offer from Al Gore 

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Social media darling Digg apparently turned down a $100m bid from Al Gore and his CurrentTV.com two years ago. As the Web 2.0 firm struggles to find a buyer, I wonder if they wished they had accepted.
The news that Al Gore applied the charm offensive to the social media firm Digg, which basically allows people to recommend articles (like this one) and for users to define their own news agenda, comes in tech journalist Sarah Lacy's book 'Once You're Lucky, Twice You're Good: The Rebirth of Silicon Valley and the Rise of Web 2.0 (on sale tomorrow Thursday).

Despite the charm, the Digg founders walked away from the $100m offer over issues of control and have been trying to sell it unsuccessfully ever since.

The price tag for Digg, like all Web 2.0 firms, has steadily risen from a paltry few million in change to Gore's $100m and most recently anything between $200m and $300m, depending on what you read.

There are questions about the business model (Digg like Twitter and many others have shown little ability to monetise their business -- and funnily enough people running the slide rule see that as a problem) and questions over if it, like a lot of Web 2.0 firms, is actually worth the money being quoted/asked for.

With Facebook worth a laughable $15bn it probably looks cheap, but is it? Bebo was probably a steal at $850m as unlike Digg (and more like Facebook) it has a much deeper relationship with its users.

For Digg though, all those you might expect to take a look have passed on the opportunity, which says as much as anything about the price tag that investment bank Allen & Company is touting on its behalf. So much for the hot start-up.

It does not help that there are so many similar 2.0 start-ups out there to Digg doing very similar things, including del.icio.us, Reddit, and StumbleUpon.

There is also another Mixx, which is getting a lot of positive buzz. It attracted the Los Angeles Times as an investor in December two months after Mixx launched.
Published May 14 2008, 11:12 AM by Gordon Macmillan
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Gordon Macmillan

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Member since: 03 Jun 2008

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