Uh-oh, Google (Nasdaq: GOOG) is unhinging its jaws again.

TechCrunch is reporting that the world's leading search engine is closing in on a deal to acquire social-news website Digg for roughly $200 million.

For those unfamiliar with Digg, it's a news aggregator site where registered users vote for stories that rise -- or fall -- in prominence. The Digg community also discusses the latest headlines.

Google snapping up Digg is certainly not a new rumor. Tech blogs like TechCrunch have been writing about Microsoft (Nasdaq: MSFT) and Google stepping up as potential suitors for several months. TechCrunch's latest entry is based on several unnamed Google insiders.

Big G's motivation
What's in it for Google? Plenty.

It's not as if Google couldn't wipe out Digg on its own if it wanted to. Yahoo! (Nasdaq: YHOO) launched Digg clone Yahoo! Buzz earlier this year. According to last night's Yahoo! earnings call, Buzz is now trumping Digg in traffic. The key, of course, is that Yahoo! showcases Buzz headlines within its popular portal. If Yahoo! has fared well with its "me too" product, imagine how easy it would be for Big G to claim the pole position.

However, there is something to be said for buying the defining brand. Other sites, like Reddit and StumbleUpon, have helped democratize the news-filtering process, but Digg is the name everyone knows. It's the verb. It's the killer brand in what is quickly becoming a crowded space. Besides, eBay (Nasdaq: EBAY) bought StumbleUpon last year in a $75 million deal. Conde Nast's Wired Digital picked up Reddit the year before that. Digg is pretty much the last big catch in social news, and it will probably be the best.

Buying the leader saves the hassle of starting from scratch, while also turning a threat into an ally. Whether it's eBay picking up PayPal after it struggled with its own financial pay service or News Corp. (NYSE: NWS) acquiring PhotoBucket after its MySpace users kept turning to the photo-sharing site for profile-page snapshot storage, it's hard to go wrong with buying the initial disruptor.

Google already had a video-sharing site, but that didn't stop it from ponying up $1.65 billion for YouTube. Spending $200 million or so, and then building on Digg's popularity by incorporating it into Google's own news aggregator page, would be child's play for a cash-rich player like Google.

There is another big reason for Google to pay up for Digg, and its name is Mr. Softy. Digg tapped Microsoft to be its contextual marketing provider last summer. Microsoft hasn't been as successful as Google in nabbing affiliate sites to display its ad inventory, but Microsoft has done well in scoring Web 2.0 darlings Digg and Facebook. Continued...