Early last week Google was all set to snap up Digg, with intent papers signed and they were well into the due diligence stage of the deal where Google would have been looking into Diggs, financials and technology. It seems Google caught a whiff of something it didn’t like and late Thursday or Friday and walked away from the deal.

TechCrunch.com says two unnamed sources close to the deal “suggested that some issue that came up during technical due diligence was to blame”. Another source said that the problem was “personality driven”, and Google decided, “that there just wasn’t a fit”. The deal appears dead, and Digg has been left at the altar.

Always a bride’s maid and never a bride, what’s a social content website to do? Push for more financing of course! Allen & Co was hired to represent them in the sale, but it seems that the investment bank is just as good at closing massive venture financings as well.

This is sure to be a relief for some Digg users who were concerned what a large corporate overlord would have meant for the company. Do you think Google would have done more harm than good?

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Google, deal, Buyout, Dig

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