Why Digg Shouldn't Sell For $300 Million

Will Digg get bought this time? Valleywag’s Owen Thomas is the latest to report that the social news site is close to selling: his sources say a “major media player” will spend $300 million – $400 million for the company.

This isn’t the first time we’ve heard Digg is up for grabs. TechCrunch’s Mike Arrington has a handy list of rumoured prices: first, for $20 million – $30 million in early 2006, then $100 million – $150 million in late 2006, then $200 million over the last few months, and now $300+ million. Mike’s advice: “Hire A Banker. Sell This Thing, Already.”

The flaw with that logic — which Arrington acknowledges but doesn’t stick with — is that Digg is still growing. And not just in price, but in traffic. With plenty of Microsoft ad revenue guaranteed to fund operations, and plenty of growth left, why not pull a Zuckerberg and keep pushing the valuation up?

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