TechCrunch reported early on Friday that four companies are in the running to place bids on Digg--Microsoft, Google, and two unidentified "media companies"--and that a sale may happen soon. It'll likely be less than the $300 million that Digg was once rumored to go for; TechCrunch's Michael Arrington cited sources who said that Google is prepared to bid $200 million to $225 million and that Microsoft, which currently serves ads on Digg, is aiming slightly lower. That's a good bit less than the $300 valuation that was floating around when Digg reportedly hired investment bank Allen & Co. to shop it around.

As for the media companies, no specifics are given, but keep in mind that Digg has deals with several traditional media companies' online arms, like CBS and News Corp.

In an interview several weeks ago, Digg founder Kevin Rose told CNET News.com that he thought selling the company to a big buyer could get in the way of running it efficiently.

One TechCrunch commenter noted, "Good for them, but Diggers will complain either way," referring to the site's active and opinionated crowd of regular users. "There's no pleasing them."

UPDATE: appearantly not true, accrding to Digg team blog:

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.

Sorry to burst any drama theories, but they aren’t true. We remain focused on improving Digg and rolling out great features.

http://blog.digg.com/?p=114

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