All Things Digital

While rumors of its impending re-sale have apparently been greatly exaggerated, what’s true about StumbleUpon is that its new Web-centric look and feel and a new partnering program represent a major shift for the online discovery service.

The San Francisco-based company, which was founded in 2001 and sold to eBay last year for $75 million, is announcing tonight that users will no longer have to register or download its toolbar to “stumble” the Web.

Users can now simply start on StumbleUpon’s site, for example, and stumble all over the Web using their Web browser as guide rather than a toolbar.

The move is being made simply because most Internet users are increasingly loath to install Web plug-ins like toolbars, a requirement that naturally has slowed the growth of StumbleUpon’s service over time.

Currently, StumbleUpon has about six million registered users, although only a fraction of those are responsible for the approximately 12 million daily “stumbles,” all using a toolbar.

“We wanted to attract users who do not want to use a toolbar, making it easy so they could use the service right from the get-go,” said Garrett Camp, co-founder of StumbleUpon, in an interview with BoomTown earlier today.

Camp noted that that the toolbar–which has been downloaded between 11 and 12 million times–has seen that growth slow over time. Nonetheless, it is not being eliminated either.

“[Toolbar adoption] was still growing, but not accelerating,” said Camp. “Being able to stumble without one was the biggest feedback we got from users.”

Along with the Web-stumble change, StumbleUpon is also unveiling a redesigned homepage–see an example of it below; click on the image to make it larger–which is an attempt to make it more of a destination.

With the new look, visitors can find content by topic and more related to interests. Other changes include a new look for profile pages, as well as user reviews, rating and comments.

Along with its distribution shift and site renovation, StumbleUpon is unveiling a partner program called StumbleThru that will allow visitors to discover content within those sites without going to StumbleUpon.

Sites–starting with HowStuffWorks.com and the HuffingtonPost.com and followed within weeks by RollingStone.com and National Geographic–will display a StumbleUpon “badge” or custom widget.

It is not unlike similar buttons that now dot Web pages from news discovery services like Digg, which users can click to find related pages.

Essentially, much as Google (GOOG) delivers custom search within Web sites, StumbleUpon is offering custom surfing, giving publishers StumbleUpon technology to allow its users to surface content within their sites that is often deeply buried.

As to the blog reports that eBay (EBAY) had put StumbleUpon up for sale after owning it for a little more than a year, Camp essentially dismissed them, noting that the unit is still operating as an independent subsidiary of the auction giant.

“They have given us a lot of runway,” said Camp.

Here is the new front page of StumbleUpon:

Also, here is a video I did last year at the exceptionally noisy (sorry!) party that StumbleUpon threw after it was sold to eBay a little more than a year ago:

So what will Microsoft’s (MSFT) next quarry be?

Facebook? AOL? A series of small Web 2.0 stars like Digg (probably too late, as Google is already first in line there again), Spot Runner and others?

That is, if there will be one after the Yahoo (YHOO) takeover debacle.

Or, if the software giant somehow screws up the courage and, despite the constant rejection, goes back again to try to scoop up Yahoo.

In a post Friday, BoomTown made the case that Microsoft was not going to do that, burned too many times and ready to move on for various reasons (regulatory problems, poisoned relations and sheer pique).

That is not to say that I think Microsoft should walk away. It should not, as I argued two weeks ago in a post titled “A Deal Must Be Done.”

As I wrote: “Because, if [Microsoft CEO Steve] Ballmer is serious about his contention, which he made fervently onstage at D6, that the software giant keeps ‘coming and coming and coming,’ it simply cannot make that attack from a piddling 9% market share in the online search business.”

No, indeed, and that’s why it should watch carefully as the price of Yahoo’s stock drops and what happens between Yahoo and billionaire activist investor Carl Icahn.

Icahn is waging a proxy war against Yahoo, which should come to a head at the company’s board meeting on Aug. 1.

So if Ballmer is serious about competing strongly in the search-ad market, he must keep Yahoo in mind, no matter the checkered history of their dealings so far.

And even, as several sources tell me, swallow the bile it must have had after Microsoft thought it won the search deal with Yahoo, at least until a June 8th meeting in which Yahoo offered the whole company or nothing.

Yahoo then turned around and signed with Microsoft archrival Google (GOOG) last week.

“They were uncorking the champagne last week on the Yahoo search deal and then it all went sideways to Google,” said one source. “Someone’s head will roll.”

The big head here, of course, is Platforms and Services Division President Kevin Johnson (pictured here), one of the big proponents of the various deals with Yahoo.

Now, he and others at Microsoft have to be scrambling for alternative schemes to figure out a way to stay in the game.

While some think Microsoft should stick more to its knitting and buy enterprise companies like SAP, Ballmer and Johnson have been adamant that online ads will be its next great business.

And, given the growth there, being No. 2 in the space is not the worst place to be.

In any case, many expect a bold step from Microsoft in the space now.

The obvious move is a splashy bid for Facebook. As before, Microsoft continues to send subtle signals of interest, now via third parties, to the social-networking site.

Not so fast, though.

As much as many at Facebook would like the sell out for a price tag in the $10 billion to $15 billion range, CEO and Founder Mark Zuckerberg remains uninterested and seems willing to continue resisting the pressure (see BoomTown’s take on that here).

As for AOL–it’s a more likely scenario, given it would allow Microsoft to double down in the display space with the Time Warner (TWX) division’s Platform A ad unit and also gain some other strong properties (such as in video search with Truveo, with widgetmaker Userplane, as well as in instant messaging).

It would also probably like to give the boot to Google, which now serves up AOL search ads (and which also holds a 5% stake in AOL).

Microsoft has been very close to buying AOL before, once even considering spinning its Internet properties and AOL into a newco, so it does know the lay of the land there.

And Time Warner CEO Jeff Bewkes is casting about for solutions to unlocking the value of the interactive unit, which has always needed to run free from the mother ship.

In fact, here’s some video highlights of my interview with Bewkes at our recent D: All Things Digital conference, in fact, where he discusses AOL’s challenges:

Imagine this:

Google (GOOG) starts buying up a series of promising and innovative Web 2.0 companies that Microsoft (MSFT) is either partnered with or clearly is or should be interested in.

It starts with Digg, moves onto, say, Spot Runner and others (Meebo, FriendFeed, iLike and even Slide?), focused especially in the online ad, messaging, online apps and mobile spaces.

And, just to stir up the pot, why not take a gander at some bigger Internet fish? Facebook, for example. Or even eBay (EBAY), which is looking more and more like acquisition bait to me.

It could happen. Some of it will. And sooner rather than later, I would guess.

As Microsoft contemplates its next move in the Internet space after its failed bid for Yahoo (YHOO)–in order to realize its stated goals of being a big player in the ad and search space–it feels to me like it is moving with a Yahoo-level of lugubriousness.

Making some unimpressive announcements (Cash back for search? Now there’s a non-game changer), playing coy with regard to Carl Icahn’s proxy fight against Yahoo and noodling around with plots to buy part of Yahoo, Microsoft has essentially gone radio silent.

And while many smart minds think Yahoo is Microsoft’s only true path to serious competition with Google and should just cut to the chase and make another bid, it seems to be just lazily circling.

Maybe it is actually feverishly working on some amazing and bold renewal of its Yahoo deal behind the scenes, which would be great.

It better be doing something, since it seems as if Google has no intention of backing off in its bid to dominate further what it already dominates.

Clearly, the search giant had no problem getting Microsoft’s face in its takeover battle with Yahoo.

In fact, looking forward at the larger Internet battlefield–which will obviously be almost entirely fought between Microsoft and Google for the next few years, at least (although an unknown force will also surely emerge)–how Google has behaved with regards to Yahoo is instructive.

As Microsoft, forced to make a hostile bid this February after being rejected time and again by Yahoo in 2007, faced even more rejection from the Internet portal, it did not take long for Google to enter the fray.

Its tactics were to be a helping hand, a strong alternative and a flexible partner who could get Yahoo out of its jam by offering a deal that would, of course, help Google too by allowing it the chance to grab another tasty slice of the online search-ad pie.

And to throw salt in Microsoft’s wounds, its top execs then publicly pooh-poohed the deal as anti-competitive, specifically with regard to communications and display advertising.

This, still pending, even as Google’s own possible search-ad outsourcing deal has been quite questionable from a monopolistic point of view.

Now, since Microsoft does not feel compelled to make any kind of significant move, all eyes should be on what Google does next.

So, even if it is a small move like buying a Digg–as BoomTown has written again and again, the pair have been seriously talking with each other for months now, so watch that space–or some other prominent Web 2.0 start-up like it, such a thing would be a clear indicator of Google’s intentions going forward.

In part, that is to keep Microsoft from getting any kind of true traction in Silicon Valley, as it would have if it had managed to purchase Yahoo.

Welcome to Microsoft CEO Steve Ballmer’s nightmare.

So–as Freddy says–whatever you do, don’t fall asleep!

Please see this disclosure related to me and Google.

Today, we debut our new redesign of the home screen of AllThingsD.com.

It is, in fact, our second redesign since we launched the site in late April of 2007, although it is a much more drastic redesign, with a lot more elements added.

Why did we do it? No, we are not hyperactive (OK, we are, but we are taking medication for that).

Actually, it is because we in the ATD brain trust (that would be Walt Mossberg and me), along with our many much-more-intelligent staffers and advisers, wanted to bring even more digital news and analysis to our readers by making more stories available on the front page from us and also from around the Web.

Our aim was simple: Now newsier than ever!

In fact, we hope you will find our new look linktastic, as we try hard to embrace the notion that ATD’s audience wants to be able to find great tech and media stories anywhere and everywhere.

Just fyi, the inside sections remain exactly the same–it is only the front page that has undergone the renovation.

Here’s a quick tour, from the top to the bottom of the page:

Megablog: We combined the BoomTown and John Paczkowski’s Digital Daily blogs in one rolling one in the center rail.

We felt that it allowed us to feature a lot more of our stories on the main page longer, up to 20 typically, and also made it easier for readers to find stories before they dropped off the front.

We will be adding more material to this section soon, as we develop our content further.

Walt Mossberg: Walt’s weekly Personal Technology and Mailbox columns and Mossblog, as well as Katherine Boehret’s Mossberg Solution, move up and to the right in a high-profile spot.

As ever, Walt is the site’s amazing anchor and a tech consumer’s greatest adviser, telling it like it is and writing reviews that matter.

Tech Headlines: On the top left, we wanted to bring in the stellar work from our Dow Jones brethren at The Wall Street Journal, Barron’s and MarketWatch, as well as from the Dow Jones newswires, to give readers links to as many stories as we can as news breaks.

This section will be updated every nine minutes to keep it fresh and new.

Voices: This section on the left remains the same, except it goes vertical. We try to hand-select (no stinkin’ algorithm for us) from across the digital blogosphere, so we can feature blog posts we think you need to see to keep up.

Also, expect more guest bloggers who write original posts just for ATD, like one tomorrow from Slide’s Keith Rabois, giving BoomTown a hard time for our problem with juvenile widgets.

The Tech Top 10: Also on the left, just below Voices, we keep our edited Tech Top 10, a list of the stories we think you need to know about every day.

Video: On the right is our featured video. We do a lot of video at ATD and we will feature our latest-posted here.

Tech Around the Web: Also on the right, we are posting, via RSS, the feed from four digital news sources we like and think are useful for our audience.

Two are editorially driven sites, paidContent and GigaOm, who we believe are combining the energy of the blogosphere and also providing readers with trusted reporting that also adheres to the standards of accuracy and ethics we try to operate under too.

This is a big focus for us at ATD and we want to point readers to high-quality material. They say you are judged by the company you keep and we could not agree more.

Both Digg and Techmeme, of course, are the key news aggregators of the sector and we like how helpful they are in surfacing important tech and media stories for readers.

Just click on each tab to get to each section. This section will also be constantly refreshed throughout the day.

More ads: Well, we have to pay the bills, don’t we? We hope you do find them useful and don’t find them too intrusive.

There will be even more to come from us in the coming weeks, especially as we gear up for the sixth edition of the D: All Things Digital conference, which is taking place May 27 to 29.

So, please let us know what you think of our new look, as we would love feedback.

And special thanks to all who worked on the redesign, including Mike Monteiro of Mule Design Studio and especially the tireless and multi-talented Adam Tow, our Web genius.

Project Granola?

Apparently, that’s the jokey nickname that’s been given by some in the company to Microsoft’s (MSFT) new online strategy, in the wake of its failed efforts to acquire Yahoo (YHOO) that ended in a big heap of mess this past weekend.

Now, sources tell BoomTown, it is all about “organic”–hence the image of a healthy handful of granola (except for the fact that, in my experience, nobody really likes granola after eating it as much as they think will before).

In any case, it is a word Microsoft folks have been slipping into the conversations with BoomTown over the past few days, so much so that I have started to feel like I was talking to execs from Whole Foods.

Now Microsoft’s greenness has gone public.

Case in point: Brian Hall, Windows Live General Manager, who trotted out the organic word in front of Merrill Lynch analysts yesterday, as reported by CNET’s Ina Fried, saying: “We’ve withdrawn the offer and moved on, and now are focused on how we grow as fast as possible organically.”

But what does organic mean exactly?

Two things, it seems.

First, stepping up spending on marketing, technology and research to try to find ways to differentiate from Google (GOOG) and get into the No. 2 spot now held by Yahoo.

Of course, that plan has not worked out so well as yet for the software giant, with Microsoft spending billions of dollars with no profits and little gain in online search or ad market share, while its archrival Google keeps growing stronger.

Even so, while in Korea today, Microsoft Chairman Bill Gates backed Microsoft CEO Steve Ballmer’s do-it-yourself path and his move to walk away from Yahoo.

“The key decisions on that will be made by Microsoft CEO Steve Ballmer, who took a look at Yahoo and decided that, on our own, he likes the stuff that we’re doing,” said Gates.

Gates also added what amounts to the second option for Microsoft. “I wouldn’t rule out some partnerships, but we don’t have anything imminent there,” he said.

While a return to Yahoo is a possibility, in fact, buying up Web 2.0 stars is likely to be a bigger focus of the company.

“Yahoo can twist,” said one source. “Microsoft has lots and lots of other options.”

According to sources close to the company, for example, Microsoft’s bankers had been putting out subtle signals to Facebook to see if it would be open to a full buyout.

Microsoft already invested $240 million in the hot social-networking site, an investment that gave Facebook its kooky $15 billion valuation.

And its execs have long told Facebook execs they wouldn’t mind a bigger bite–um, like all of it.

“We just wanted to gauge their interest, more than any real effort,” said another source, who expects Facebook to stick to its longish path to an eventual IPO.

But, as is no secret, Microsoft has selections all over Silicon Valley to help it improve its Internet chances.

Those would include buying bigger vertical sites in strong categories like autos or jobs or finance, and also scooping up smaller but fast-growing socially oriented sites like Digg, Meebo, Yelp or focusing on ad plays like Spot Runner (which just got another big dollop of funding).

There might even be some sense in spinning some of these and all Microsoft Web units off into a separate Internet company, which would be another way of integrating even bigger deals for properties like Time Warner’s (TWX) AOL or News Corp.’s (NWS) MySpace (which are longer shots, I think).

In a post I did in February right after Yahoo rebuffed Microsoft for the first time, I suggested such a course for the company.

As I wrote:

Here’s a list: LinkedIn. Digg. Flixster. Slide or RockYou. Veoh. WordPress. Sphere. Sugar. Some international stuff. And more.

Then, some noted, Microsoft would have to give massive financial incentives to those entrepreneurs to stay and thrive. Most importantly, it would have to keep its Redmond hands from interfering.

Now that would send shivers up the spine of Larry and Sergey.”

And that, most of all, would be more like icing on the cake for Microsoft and be much more tasty than a bowl full of granola.

And, as Martha Stewart says: It’s a good thing.

Who’ll get Digg? (Odds-on favorite and sources tell me much sooner than later: Google.)

And who might make a bid for Slide, RockYou, LinkedIn, Meebo or imeem? (It might be smart for News Corp. [NWS] to double down in the social- networking space, if it can’t trade MySpace for a piece of Yahoo.)

And what about a plethora of really useful and interesting small start-ups all over Silicon Valley and elsewhere that are going to have to eventually find safe harbors when this Web 2.0 thing cools off, as it inevitably will. (AOL [TWX], Amazon [AMZN], eBay [EBAY] and, again, Google [GOOG], are natural choices.)

But not Microsoft (MSFT) or Yahoo (YHOO) if they persist in competing in this endless geek cage-match for too long.

Yesterday, more blustering bluster from Microsoft when it said, during its quarterly conference call, that it would not pay more to acquire Yahoo and might very well walk away from the deal.

My advice: Microsoft CEO Steve Ballmer should stop talking and start walking. If not, pay up and finish the deal.

And Yahoo’s CEO Jerry Yang should cooperate and stop its now-tiresome posturing (we get it, it’s worth more!).

Why?

Well, while the pair remained locked in mortal combat, a status that will continue if they actually do manage to unite and have to then conduct a doubtlessly slow-moving merger, their main rival Google and others are the likeliest to benefit every day this drags on.

Right after Microsoft made its unsolicited for Yahoo in February and it was quickly rebuffed, BoomTown suggested in a post that the software giant move on quickly and use its tens of billions to buy up the choicest and most innovative companies in the digital space.

What I wrote then bears repeating:

And what are the other options Microsoft might have that are actually better than scooping up Yahoo, especially to serve its Captain-Ahab obsession with harpooning the Great White Whale of Google?

If that is the actual goal, then many point out that a Yahoo win does not really frighten Google all that much, since the search giant has done just fine competing against both already.

In addition, many noted that a union of the pair, which would distract both Yahoo and Microsoft, might not be the magic bullet needed to fell Google from its high perch. And then what?

One idea I have heard, for example, was that Microsoft take its $44.6 billion in cash and stock it plans on spending on Yahoo and go on a shopping spree of the Web 2.0 companies all around Silicon Valley and all over.

And not just a few–lots and lots of them. And, more than one person suggested, it should start with Facebook, even at that wacky $15 billion valuation that Microsoft itself validated when it invested $240 million in the social-networking site recently.

“So what if it is only worth $10 billion or even less,” said one person. “They could lose a lot more on the risk of buying Yahoo.”

With the $30 billion left over, it could be like Christmas in July for the geeks and venture firms of Silicon Valley. But Microsoft could scoop up a lot of good stuff, even if prices are high.

Here’s a list: LinkedIn. Digg. Flixster. Slide or RockYou. Veoh. WordPress. Sphere. Sugar. Some international stuff. And more.

Then, some noted, Microsoft would have to give massive financial incentives to those entrepreneurs to stay and thrive. Most importantly, it would have to keep its Redmond hands from interfering.

Now that would send shivers up the spine of [Google's] Larry and Sergey.”

It still would. So maybe, as it has threatened yesterday, Microsoft should run and not walk.

Please see this disclosure related to me and Google.

And, as BoomTown wrote yesterday, so the war of attrition for Yahoo begins.

Not with a bang, but a whimper. And so much whine, I am considering serving up a nice plate of cheese to all players.

But while the first moves by Microsoft (MSFT), which is seeking to take over Yahoo (YHOO), seem a bit weak, it is likely the more significant bombs will start flying next week.

But not quite yet.

First, came a not-so-subtle insinuation from Microsoft Steve Ballmer that he could take his marbles and go home any time.

He noted yesterday in a speech in Milan (Milan? OK, we’ll go with it) that the software giant is “prepared to move forward alone without Yahoo.”

A show of hands of who actually believes this claim, please, a classic go-fish negotiating ploy? No one? We thought so.

Then, comes the artfully worded Wall Street Journal story today, in which it is revealed that some at Microsoft are skeptical of the deal.

Apparently, Microsofties are worried that the job of merging Yahoo into Microsoft will take precious attention away from, well, them!

Well, that’s been the biggest open secret at Microsoft. Almost anyone you talk to notes that the Yahoo deal is risky, but it would be done no matter what due to Ballmer’s determination to use Yahoo to better hammer at rival Google (GOOG).

“This is Ballmer’s war,” said one Microsoft employee to me recently, who also noted that it is still a good move for Microsoft, despite the slowness of the attack. “I doubt he will surrender.”

Well, BoomTown suggested Microsoft do so back in mid-February in a post, noting that Ballmer might do better to use the $41 billion to buy up every hot start-up in Silicon Valley–Digg, Meebo, Slide and even the hopelessly high-valued Facebook–and still have money left over to buy everyone a tank of gas.

The Journal story also listed previously reported names of possible directors for a proxy slate Microsoft must nominate to replace Yahoo’s current board.

They include, noted the story, “former Nextel Partners Inc. CEO John Chapple, former Grey Global Group Inc. CEO Edward Meyer, Jaynie Studenmund, the former chief operating officer of Overture Services Inc., which was later acquired by Yahoo, and former Adelphia Communications Corp. Chief Financial Officer Vanessa Wittman, according to people familiar with the matter.”

Not to be whiny about it or anything, but with no truly prominent Internet executive or figure among these director possibilities so far, BoomTown would have to say we are profoundly underwhelmed by the list.

Thus, we await more powerful forces.

And that might be sooner than later. Microsoft will announce its earnings this afternoon, which–if they are strong and lift the price of Microsoft stock and, therefore, the Yahoo offer–could be the first big gun to fire in the proxy fight.

Last night, BoomTown loaded the kids into the car–you try finding a sitter on a Tuesday night!–and went early to a pair of dot-com parties being thrown at some trendy spots in San Francisco related to the Web 2.0 Expo taking place this week.

Our quest was to find out what some savvy Web 2.0 types thought would–or should–happen next in the Microsoft (MSFT)-Yahoo (YHOO) takeover battle, following Yahoo’s earnings report yesterday.

Thus, we made the scene–at widgetmaker RockYou’s “Rockin’ Spring Mixer” at Bong Su and news site Digg’s get-together at Mighty–to get some advice on what’s going to happen next.

Frankly, BoomTown is running low on ideas and we got a good range of predictions to bolster our bare cupboard.

So here’s a good mix of interviews on the topic, with folks such as RockYou CEO Lance Tokuda, Broadband Mechanics’ Marc Canter, Digg Founder Kevin Rose (in the very, very dark and noisy club–sorry!–but you can hear him at least), Digg CEO Jay Adelson and others.

And, at the end of the video, using a dinosaur toy as a metaphor, Louie and Alex Swisher, who pretty much have the situation down cold.

Here’s the video:

Oh, Max!

I just got through telling someone who asked me that I thought you, Slide founder Max Levchin, was one of the smarter Web 2.0 characters.

Then, of course, you get to be on the cover of Portfolio magazine for its “Brilliant” issue this month. Apparently, Max, you are Silicon Valley’s new “It” Boy.

But for all your apparently massive amount of brain cells, which should be on display at your keynote today at the Web 2.0 Expo in San Francisco, how can you be so dumb as to stumble into that same old rabbit hole as so many other Internet hotshots?

Yes, Max: The goofy photo.

In your case, you look good in the coat-and-tie get-up. But please tell me why, oh, why are you balancing a giant lightbulb on the top of your head, as seen here?

It just ain’t dignified!

(Levchin revealed to me via email last night that he actually balanced the monster bulb on his head–but I remain unimpressed.)

Still, you can be comforted to know, though, that you join a legion of other legendarily goony tech figures in the continued march of egregiously wacky pictures.

Such as:

Microsoft’s Bill Gates and his prom date, a PC:

That lovely couple, Larry Page and Sergey Brin of Google, and those irksome colorful exercise balls (not that there is anything wrong with that):

Digg’s Kevin Rose channels Wayne’s World:

Former Netscaper Marc Andreessen as Le Dauphin of France:

And, my personal choice for goofy-de-tutti-goofball photos–Amazon’s Jeff Bezos with his noggin in a box:

At some point and sooner than later, if I had to make a bet, Digg will be sold. And, likely as not, the most likely owner for the popular new site is Google.

And it is no real secret in Silicon Valley that the pair have been talking on and off for a while now, as Google (GOOG) mulls where to take Google News and Digg ponders how it can grow and improve its reliability by being linked to the largest and most neutral company it can.

But after all the Sturm und Drang around news of a phony bidding war for Digg between Google and Microsoft (MSFT) with prices hovering around $200 million that broke out a month ago (which BoomTown refuted in a post here), I thought it was long about time I chatted with its CEO Jay Adelson, to talk about the future of Digg and also the state of news online.

While photogenic Digg founder Kevin Rose often gets the focus as the geek-in-charge at the company, Adelson has had as much skin in the game and also has a deep tech background at early Internet networking companies like Netcom and also as a founder of Equinix.

Traveling between his home in New York and Digg’s San Francisco HQ, Adelson has been helming the user-generated news-discovery site, as it has grown to its current 27 million unique monthly visitors and 250 million page views. Adelson says Digg is poised to be profitable this year.

And while it is easy to find problems–pointing to aggressive competitors like Mixx and Yahoo’s (YHOO) BuzzTracker and serious and nagging issues around technological glitches (like yesterday, for example)–Digg still remains one of the most interesting and substantial start-ups to emerge from the Web 2.0 landscape.

Adelson talks about all this, with an interesting perspective on the hothouse that is Silicon Valley and also where things are going in the digital sector.

Here’s the video:

Please see this disclosure related to me and Google.

“Completely inaccurate” does not even begin to get to the heart of the problem, but we’ll get to that later.

First, let’s see if we can sort this latest rumor about the acquisition fever wafting around the popular Digg news site, published by TechCrunch last week.

Its take: That Digg has been pitching itself for sale using bankers from Allen & Co. and was poised to receive high-priced bids from archrivals Microsoft (MSFT) and Google (GOOG), and also had interest from two unnamed major media companies (a good guess here would be CBS and News Corp., owner of Dow Jones, which owns this site).

How exciting! How dramatic! How gripping!

And: How untrue!

That’s because once you actually take time to do actual reporting, you find the story is quite a bit less exciting and dramatic and gripping–pretty much nothing more than part of the typical sniffing and circling that goes on constantly in Silicon Valley.

Here’s what my many and varied sources close to all the companies involved told me, related specifically to the TechCrunch report: Digg is not going around hawking itself, but using bankers to handle interest it receives fairly regularly; and neither Google nor Microsoft is poised to make a bid hovering around $200 million (in fact, most every possible acquirer I spoke to said $60 million to $80 million was a more likely price if Digg were ever sold).

This is not to say that Digg could not suddenly get an amazing offer too good to refuse, from any of the parties and others, as any company could.

And Google is a natural bidder and has to be interested in Digg, of course, given that it needs to add more to its Google News product and likes highly distributed plays like Digg.

In addition, given that it did a guaranteed ad deal with Digg last year and might have to have alternatives if its Yahoo bid fails, Microsoft is the other obvious candidate to own a site like Digg.

But, once again (these Digg sale rumors surface with wearying regularity, much like the colds I get from my kids), Digg is not embroiled in this fantastic kind of Spy-vs.-Spy battle between Google and Microsoft, news of which rocketed around the Web and took on a life of its own.

In other words: While Digg has been to visit the Googleplex and Microsoft to discuss all sorts of linkups, including recently, along with several others over the last two years (Yahoo, for example), from partnerships to traffic deals that could–of course–all lead to a possible acquisition, its executives have not been waiting by the fax machine for offer bids to start rolling in of late.

Here’s the duller truth, in contrast to sexier rumormongering: Of course, larger companies are interested in high-growth Internet phenoms like Digg, whose massive distribution on the Web via Digg buttons and a motivated audience is impressive.

The user-generated news-discovery site that has grown quickly to 27 million unique monthly visitors and 250 million page views is poised to be profitable this year.

While some debate its helpfulness at generating monetizable traffic, when Digg points to a story, huge audience spikes quickly follow.

That’s attracted attention from larger companies, from both the Web and media worlds, all of whom have been calling the still-small start-up (50 employees) for a getting-to-know-you chat.

“Everyone is looking to see if they can copy Digg, partner with Digg, acquire Digg,” said one person familiar with the company.

That has been both a blessing and a distraction to the company, I would imagine, as it takes the eye off the ball of actual executing on a day-to-day basis. As I have seen with a lot of companies I have covered, acquisition interest can be a heady experience and not always in a good way.

And there have been some actual offers to buy Digg over time, although not recently, and none has reached even close to the kind of fire-alarm state that TechCrunch loudly rang last week.

The report was so over the top that it prompted Digg CEO Jay Adelson to refute it on the company’s blog.

He wrote: “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.”

Of course, that was not enough of a denial for TechCrunch, which stood by its source, and then spun a somewhat convoluted conspiracy theory about Adelson’s post: “Digg may have had an angry Microsoft and Google on its hands this morning after this post, leading Jay to comment on this where they usually wouldn’t. Jay certainly wouldn’t say anything untrue in his post, but there’s a lot he isn’t saying in that post, too.”

But that’s kind of like trotting out the old when-did-you-stop- beating-your-wife courtroom ploy. Quick, Della, parachute in Perry Mason to get Adelson to confess to his alleged crime!

Sure, Adelson could have been even more specific, denying Digg was for sale completely and once and for all, I guess. But no public or private company would ever do such a imbecilic thing, as everyone is ultimately for sale, and saying otherwise would have also been completely inaccurate.

And, it goes without saying, no one wants to be completely inaccurate, do they?

Please see this disclosure related to me and Google.