Google did not announce an agreement to buy Digg. The community was correct. --The Industry Standard

Michael Arrington has it that Allen & Co.’s efforts over the last few months to find a buyer for the social news site have intensified and that there may be a bidding war between Microsoft and Google, with an anticipated final price just north of $200 million.

Digg acquisition rumors have been swirling for what seems like years, but this time it might actually happen, and the fierce competition between MSFT and GOOG in any of a number of sectors where they are currently butting heads might mean a better payday than expected for Kevin Rose and pals.

This is a prediction that Google will announce a proposal to acquire Digg by March 21. “Acquire” is defined as having purchased a majority stake in the company.