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Google About to Buy Digg?

Google reportedly is poised to grab another chunk of the Internet, and once again it would be at Microsoft's expense.

Michael Arrington at TechCrunch, citing undisclosed sources, says the search giant, which already played a significant role in thwarting Microsoft's plans to buy Yahoo, is ready to grab user-generated news site Digg for about $200 million, a move that would give Google another piece of the competitive online ad space.

In his blog, Arrington says that, despite previous denials by Digg CEO Jay Adelson that previous reports about negotiations were erroneous, the two sides are ready to close the deal.

"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."

The deal would be the latest skirmish between Google and Microsoft as they vie for traction in the online world, a battle that Google is winning right now, what with its DoubleClick acquisition and advertising deal with Google. But if the comments to Arrington's blogs on the Google-Digg negotiations are any indication, there is a growing uneasiness with Google's rapidly growing dominance on the Web. "I really don't want to see [G]oogle run the [I]nternet," said one commenter to Arrington's March 7 post about Google and Microsoft looking at Digg.

Of note is that a good chunk of Digg's revenue reportedly comes from Microsoft through a three-year advertising agreement, a deal that would certainly fall through should Google follow through on the purchase.

It also further increases Google's push into social networking as the company moves beyond its search engine origins.