Digg: Better off with Microsoft or Google?

Digg is reportedly for sale with the leading bidders being Microsoft, Google and two media companies. The big question: What's best for Digg and its community?

TechCrunch is reporting that Google and Microsoft are in a bidding war for Digg with a price tag in the $200 million to $225 million range. As Fred Wilson notes that's a fine price tag.

But let's consider the moving parts: Microsoft has an advertising deal with Digg and Google may be looking to upend that relationship. Google could use Digg to be the engine of Google News. Microsoft just wants to look trendy. The New York Times or some other media player could probably get a nice return from Digg and a lot of traffic. And then there's the Digg factor: What's the best fit? A quick analysis:

Digg as Microsoft unit: Would Digg's Kevin Rose work out in Redmond? Sure, the two parties are tight--at least tight enough to have an ad relationship. But I don't exactly see Rose rising up the ranks to be mini-Ballmer even though Digg's leader probably could do a mean Monkey Boy. In fact, Microsoft could be downright stifling to Rose, who by most accounts is a fine guy that's a lot of fun. Where would he fit in to the Microsoft empire? What happens if Rose takes his money and runs? Will there be a community revolt at Digg?

Digg as part of Google unit: Culturally, Rose would feel right at home at Google. Google's culture is a little less corporate and so is Rose. Strategically, Digg could be the engine of Google News. And Google gets to edge out Microsoft as an ad provider. It's doubtful the Digg community would freak out.

The New York Times: Wilson notes that the New York Times may be a better fit for Digg because both specialize in news. This fit isn't as odd as it seems. The Times has been hands off with About.com, gets this Internet thing and could see Digg as a nice way to grab more inventory. Culturally, Rose with the Times would be interesting to say the least.

Time Warner: This old stodgy and bureaucratic media operation has one thing going for it in the bidding war: It didn't screw up Engadget and let those fine folks go about their business. If Time Warner did the same with Digg perhaps it is an option.

Where do you think Digg should wind up?