Digg Sale might end up with Microsoft or Google

Rumors leaked to TechCrunch suggested that both Microsoft and Google are preparing a bid to buy out Digg.com. I’ve previously discussed why Digg would want to sell but to whom it would sell is another question altogether.

A price tag of around $300PHP 17,606INR 25,425EUR 286CNY 2,183 million is not bad and only after closing the deal will make eventually can we say that Kevin Rose has successfully made it as a dotcom success. So between Microsoft and Google, it’s going to be a tough choice:

• Yahoo is obviously out of the equation since it already has Yahoo! Buzz. Google is doing a similar implementation via Google Reader. It’s mostly Microsoft that doesn’t have anything resembling social news aggregation. But if Digg will end up with MS, users might revolt (again) and that would be uncool. Oops, if Microsoft eventually buys Yahoo, then they get Yahoo! Buzz too.
• Sites like Digg.com will be more popular and credible if they are operated independently of large corporations. One would only imagine how the frontpage news will look like if Microsoft is at the back-end doing some editorial moderations. Yeah, a lot of people don’t trust Microsoft.
• Digg earlier left Google in favor of Microsoft for a multi-year advertising deal. That’s why you see tons of flash and banner ads instead of Google AdSense on Digg nowadays. It would be a slap in Microsoft’s face if Google snatched the site back out of its clutches.
• On the other hand, the $250PHP 14,671INR 21,187EUR 238CNY 1,820-$300M valuation of Digg was heavily based of Microsoft’s guaranteed deal with Digg. If Google gets it, Microsoft will drop out and the valuation is skewed. Google’s DoubleClick network might come in and do the ad display monetization so Digg users will continue to see them annoying smiley banner ads.

And oh, what will happen to Diggnation which is separately owned by Revision3?