I’m grateful that Valleywag has not stopped publishing “news” on a day like this.
Jokes aside, they have a story up that suggests that News Corp. is looking to acquire Digg for $340M and take a stake in Revision3, Kevin Rose’s second company (his first one is Digg, his third one is Pownce. Try to pay attention, people).
Bear in mind that Digg last year asked for $150M and News Corp. balked, then it launched MySpace News. MySpace is growing like crazy but Digg has since signed a $100M ad deal with Microsoft, suggesting that a 3x revenue deal is not out of the question. Of course, Digg works because of its independence; any saturation of ads (laced in the headlines) or an emphasis to drive stories out to one particular news source’s website would make Diggers run for the hills. If I were Kevin Rose and company (Jay Adelson, Greylock etc.) I’d continue to build Digg because the site is growing, revenue is coming in and newspapers’ desperation will only heighten in years to come. But, maybe that’s just me.
Anyway, Rose has since split his attention between Digg and his other babies, one of which is Revision3 (disclaimer: Revision3 is a fellow online video content producer, like WatchMojo.com, though they focus on tech and us lifestyle).
Anyway, Revision3’s flagship product remains DiggNation… if you’re wondering. What’s really odd about the story that Valleywag is running, is not that:
It’s a curious rumor, especially for its specificity and detail. The only problem with it? No one close to Revision3 seems to have heard anything about the plan.
Sure, that makes the story suspect. More suspect, is the following:
And there’s a new angle to a potential deal: At the same time, News Corp. would take a stake in Revision3, the online-video startup which shares founders Kevin Rose and Jay Adelson with Digg.
It’s widely known that News Corp. is not really into owning stakes - ie. renting companies - it is into owning the whole kit ‘n’ kaboodle.
All right, I used the term “whole kit ‘n’ kaboodle”, which means that I have to sit out 2 minutes in the penalty box. But before I do, what makes the story even more odd, in my humble opinion, is that:
A News Corp. stake could bring distribution on MySpace and Hulu — and, most importantly, keep Rose’s interests aligned with both Digg and Revision3 after a News Corp. buyout.
Now call me crazy, but running with that angle, what’s stopping Rose from “phoning” it in - with it being Digg and Revision3 - while he focuses on Pownce.
In that scenario, shouldn’t News Corp. also buy Pownce?
Valleywag concludes:
So this deal could be nothing more than a cocktail-napkin sketch circulating within News Corp., not yet refined for the negotiating table. Or, perhaps even a trial balloon, strategically leaked.
Now maybe that’s the deal News Corp. should be thinking about…
I guess the deal for Linked In was a trial balloon, too?
Tags: Digg, M&A, News Corp./FIM, Rumors|
Posted By: Ashkan Karbasfrooshan | Nov 23rd
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