After months of stopping and resuming negotiations, it seems that Google Inc. and Digg, a popular news site, might have reached a deal according to which the search giant will acquire the small company. Rumors has it that a letter of intent has been signed by the two, and an official announcement is expected within the next few weeks.

Digg was launched 2004 and has managed to build a rather strong and devoted community in the social-media space by proving a voting system that people can use to mark web pages they like as they surf the Internet. Links to these pages are listed on the Digg website together with the number of people that have said that they like them.

What Google is after isn't Digg's technology, but rather its community. The company is in a continuous search for large web communities where it can place its ads easier, thus increasing its visibility as well as its profit. It will be interesting to see how taking over Digg will affect its community, as making it known to a wider audience might determine some fans to stop spending time on the site.

Even though takeover discussions might be in an advanced stage, Microsoft might also have a say at all these. The Redmond-based company could always come up with an offer of its own, just to stop Google from closing the deal. What is more, at this moment one third of the money Digg makes come from a partnership it has signed with Microsoft. The partnership would stop provided Digg will fall in the arms of Google.