How to turn down a buyout: lessons from Digg, Facebook, and Chris Pirillo

In the booming Silicon Valley economy, everyone's looking to buy or be bought. But not all offers are equal. How do you politely turn down a lowball without burning your bridge? Let's take a look at three turn-downs — none of which were publicly reported.

1. Check the numbers: Digg rejects Weblogs, Inc. Long before Kevin Rose's social news site reportedly rejected $40 million from Yahoo, Rose (pictured) rejected $4 million from Jason Calacanis, owner of blog network Weblogs, Inc. Did it seem like a great deal? Sure, until Rose examined the deal more closely. If he accepted, he'd give up control of Digg — and only end up with one million bucks, all said and done. Now, with Calacanis launching his own social news site at AOL's Netscape, Rose has no reason to worry — Digg's about to launch a souped-up new version to blow Netscape back out of the water.

2. Don't get cocky: Facebook rejects Yahoo This failed deal (only reported here on Valleywag may have been the last hope for Facebook. The school-based social site needs a buyout or IPO to pay back some heavy venture capital investments. With a growing staff bringing high operating costs, and sparse ads and partnerships on the site, Facebook is nowhere meeting the newer, more rigorous standards for a public offering. So when Yahoo offered a reported $1.4 billion buyout, why didn't Facebook jump into the arms of its white knight? Because someone in charge — at this point, probably the VCs — is holding out for $2 billion. Will anyone offer that before Facebook's old and busted? Don't bet on it.
3. Don't burn the bridge: Chris Pirillo rejects Microsoft Just a few months ago, the already-successful tech pundit Chris Pirillo eyed Microsoft as an employer. After some interviews, Microsoft made an offer to the former Tech TV host. Their price was too low, but the affair ended amicably — Microsoft is still the major sponsor at Chris's annual tech conference, Gnomedex.

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