Google in Final Negotiations to Acquire Digg For “Around $200 Million”

Google’s and Digg have reportedly signed a letter of intent and are close to a deal that will bring Digg under the Google News property. The acquisition price is in the $200 million range, says one source.

TechCrunch first wrote about the Google-Digg negotiations in March. Despite a vigorous denial by Digg CEO Jay Adelson the negotiations continued, although Google’s Marissa Mayer reportedly cooled on the company for a period of time.

The companies are now in final negotiations according to our sources, although it could be a couple of weeks before it closes. And while the major deal points have been agreed on, the acquisition could still fall apart. Microsoft, which was previously interested in the company, may be willing to step back in at a much lower price. Most of Digg’s revenue comes from a three year ad deal with Microsoft.