Google close to buying Digg: report

Rumours that user-driven news website Digg is close to being sold to Google Inc. have resurfaced, with the internet search leader reportedly offering around $200 million US for the social news site.

Technology blog TechCrunch, citing sources "inside and outside of Google," said Tuesday negotiations have intensified in the last six weeks, with the two companies reportedly signing a letter of intent.

TechCrunch had earlier reported in March that Digg was on the verge of being sold, with Google and Microsoft Corp. named as potential buyers. Digg CEO Jay Adelson denied the report.

Digg would come under the Google News property, according to the report.

Social news sites like Digg and CondeNet-owned Reddit let users submit stories to a news feed and vote those stories up or down. It's a method that has grown steadily popular as users look for new ways to sort and search the mass of information on the internet.

Google competitor Yahoo Inc. took the basic idea and applied it to its own service, Yahoo Buzz. Since launching in February, Yahoo Buzz has attracted 9.2 million unique visitors in June 2008, outpacing Digg, which has grown to only 6.2 million unique visitors, according to comScore Media Metrix, an internet audience measurement service. AOL also has its own version of the social news model, called Propeller.

Google has experimented with the method as well. Last year Google's testing ground, Google Labs, temporarily added a tool that allowed users to customize their search results according to their own preference.

If the deal went through it could also impact an existing three-year advertising deal between Digg and Microsoft, TechCrunch reported.