Just Sell Digg Already, Jay

@arrington?lang=en / 7:54 pm PST • November 7, 2007

One thing that has become a certainly in our little tech world – a few months can’t go by without rumors surfacing that a sale of Digg is imminent. CEO Jay Adelson and cofounder Kevin Rose are in a perpetual rumor cycle. The problem is, they seem to be the ones at fault for the rumors. The reason? They’ve been trying to sell Digg for nearly two years, on a nearly constant basis. And the guys they’re pitching keep leaking it all to the press.

Rumor History

Blogger Kevin Burton was infamously first to bat with a statement that a sale of Digg to Yahoo was a near certainty in January 2006, for $30 million (he was wrong).
We know with a high degree of certainty that Digg did try to sell itself to Yahoo, and probably others, for $20 million or more in May 2006. No offers were made, according to our sources.
By the end of 2006 the price had increased – they were asking for $150 and turned down soft offers in the $100 million range. At the time, Comscore said they had just 1.3 million users.
We have confirmations from potential buyers that Digg continued discussions throughout 2006 and into early 2007, looking for at least $100 million, but no offers were made.
Over the last few months Digg has been shopping themselves again – and the price is at least $200 million according to a source who’s been pitched. Again, no offer.
Now, we’re getting reports that a sale is imminent, in the $300+ million range. A source close to Digg says they’ve heard nothing about this. That doesn’t mean it isn’t happening. But we have no independent information that this time, the rumors are true.

Hire A Banker. Sell This Thing, Already.

In the past, Adelson has always said they have never tried to sell Digg. He says they will meet with companies when approached, but they are never the party trying to make the sale. The problem is that too many independent sources have told us that Digg has tried, hard and persistently, to sell to them. The company has been on the market for nearly two years. There is just no way to deny it.

Frankly, I don’t understand why they are so anxious to sell it. They’ve turned the corner on usage – most of the submissions and traffic today are based on non-tech stories. There is a real argument that Digg can be a mainstream news sorting service. Comscore shows them at 11.5 million monthly uniques, with a nice growth curve (see below).

There is no good reason to sell Digg when it continues to grow like a weed. But that doesn’t seem to deter Adelson and Rose from trying to dump this thing at every opportunity. They’re always asking for more than people want to pay, however, and they haven’t been able to create a bidding war to jack the price up.

Perhaps the most recent rumors are true. If they are, I congratulate the Digg team and investors. But if the rumors are as true as the previous ones (meaning not at all), then I suggest they hire an investment banker to put together a proper pitch deck, approach the key buyers, and get a real bidding war going. That’s the way to sell a company for an absurd valuation. The slow burn approach does nothing but create a never ending cycle of rumors.

Just Sell Digg Already, Jay

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