Report: Google, Microsoft Will Bid for Digg

A sale of the social media powerhouse Digg is at hand, according to TechCrunch, which says that both Google and Microsoft are expected to submit bids, with several media companies also in the running. Michael Arrington writes that Google (GOOG) is likely to make on offer of $200 million to $225 million, while Microsoft (MSFT) has been contemplating a lower bid, since much of Digg's revenue comes from an advertising deal with Microsoft. "We may be looking at a bidding war between Microsoft and Google over Digg," Arrington writes.

A sale of Digg would be a major liquidity event for co-founders Jay Adelson and Kevin Rose. Adelson is well known in the data center community as one of the founders of Equinix (EQIX).

UPDATE: Adelson, writing on the Digg blog, says the TechCrunch report is wrong. "Normally our policy is to not comment about things like this, but this morning's rumors about a bidding war involving Google and Microsoft have created such a stir we feel compelled to tell you all directly that they are completely inaccurate," Adelson wrote. "Sorry to burst any drama theories, but they aren't true. We remain focused on improving Digg and rolling out great features."