Mike Arrington recently broke the rumours on TechCrunch on how News “I’m desperate to break into New Media” Corp is eyeing Digg hungrily. Sure enough, the rumour mill has begun churning yet once again with talks of acquisition in the air.
Digg has publicly been “valued” by Businessweek at around 200 million dollars earlier in the year, and was actively scoffed at by some; perhaps in the wake of YouTube’s 1.65B purchase, it may not look so absurd after all.

Could News Corp (henceforth referred to as “Fox”) afford the 200 million for Digg?

Probably.

Is it a good fit? Don’t laugh — it just might be, according to the “Grand Master Plan to Take Over all New Media” (not the real name of their project, but bear with me).

How? Well, rumours abound that there’s been issues at monetizing MySpace. Ads are one thing, but Fox executives may be looking at MySpace as an entirely different construct — as a tool to look at youth and tool their marketing and product plans according to that tool.

Before Digg acquisition rumour came along, I thought of the idea as merely a lot of hand-waving.

Sure, you could “watch” what teens were saying, and maybe throw in a few heavy-handed attempts at marketing to them, or tossing a few surveys.

But what if –

What if a MySpace Digg’s acquisition represent an attempt at trying to harness the collective “intelligence” of MySpace to actually see what they’re interested in?

It sounds crazy — but again … bear with me. It might just make a whole lot of sense.

How? Well, could Fox be eyeing Digg’s voting machinery — with all its inherent faults — to actually predict future trends? As it is, its already branched out beyond technology right into pop culture and video.

There’s already a mirror site, “DuggTrends”, where one can see what stories are coming up — which gives immediate and real time predictions of what stories just might make the front page AND context for all of the stories.

Now imagine Fox plugging Digg right into the frontpage, or as an above-the-fold link on every single page of MySpace, routing huge streams of traffic into an already-traffic engorged site.

How interesting would Digg Labs get then?

Sure, it would definitely skew the populations on Digg, but who cares? Its exactly what Fox is looking for.

Much like Mark Cuban taking advantage of information on Sharesleuth before its actually released, its not a stretch to see Fox taking advantage of trends in the background as well.

Now, none of it is a slam-dunk, but it could be a staging ground for preparing petri dishes for future new media acquisitions, or even planning old-media marketing plans or television shows.

In an era of extreme unpredictability, could Digg represent the ultimate window into the future? Much like the Oracle of old, it might not be perfect, and it might be hidden in gobbledygook and doublespeak, but for old media companies looking to gain a toe-hold in the new media environment it might not be crazy.

It might be brilliant.