Rumor: Digg still for sale

Update: Digg adamantly denies these rumors on its company blog. 

Digg, the leading social news site, is currently in the midst of a bidding war from potential purchasers Google and Microsoft, along with two media companies, according to Techcrunch.

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This is the latest in a series of rumors of Digg being for sale. The company has hired New York investment bank Allen & Co. to help it find a buyer (our coverage). Digg has been looking for more than $300 million but now may be willing to settle for as low as $200 million, according to the report.

Allen & Co. in fact just held one of their secretive conferences, so Digg executives and potential buyers likely had some face time to talk about deals — which is part of the bank’s game plan (our coverage).

It’s rare these days to find a deal in which either Microsoft or Google is involved and the other is not. It happened last year with DoubleClick, spread on to Facebook, and now is playing out in the Yahoo deal. This tech rivalry is turning into something of Red Sox/Yankees proportions in baseball.

Microsoft already has an advertising deal with Digg (along with Federated Media). Techcrunch’s Michael Arrington thinks “Microsoft may be hesitant to value Digg based on revenue that they supply.” To that I’d add: They weren’t with Facebook. Lessons learned?

[MG Siegler contributed to this article]