VentureBeat

It’s been a little more than a month since the last rumors surfaced about social news site Digg trying to sell itself for at least $300 million.

A reliable source just confirmed the company’s plans, noting the company has hired Allen & Company, a tiny but influential private investment firm, to help broker a deal. The asking price is still $300 million, the source said.

This will come as no surprise. Rumors of a sale have been rampant for months, although until now we hear co-founder Jay Adelson has been trying to muster up interest in a sale. This is the first time Digg has hired a bank to shop the deal, we’re told.

Valleywag reported the $300 million rumor last month. Separately, it reported Digg chief executive Jay Adelson’s attendance at Allen & Company’s annual Sun Valley, Idaho get-together of the rich and famous, noting the company might be looking to find a buyer among one of the many media company executives in attendance.

Allen & Company traditionally uses the event to do what it terms “direct research” on potential buyers and sellers, then inserts itself as banker.

For more on the history of Digg rumors (including a suggestiong to “Hire A Banker. Sell This Thing, Already”), see Techcrunch’s post from last month.

We asked Digg founder Kevin Rose about a potential sale, and Allen & Company’s involvement. He told us, unsurprisingly, that “we never comment on things related to acquisitions.”

 Updated

WeatherBill, a company that lets you make money by betting on the weather, has raised $12.5 million.

The San Francisco-based company sells contracts that essentially let you put money down against bad weather hurting your business, so you can still get paid even if your business itself suffers.

You can choose your contract to be for hot, cold, rainy, snowy or dry days or seasons, and customize every specific aspect of your scenario, such as the temperature, precipitation or snow level. Choose a location with all of your weather specifications and how much you hope to earn from the contract, and the site will calculate its cost.

For example, VentureBeat could purchase a contract to bet that cold winter weather will hit the Bay Area all of next week — a way to make ourselves feel a bit warmer if this turns out to be the case (screenshot below). We’d get paid $100 from WeatherBill for every day that the minimum temperature dips below 65 F. The example below shows the contract would cost us $660. Question is: How likely is it that every day next week will be that cold? There’s a chance we won’t make our money back — and we’re not experts enough at predicting the weather to know.

But let’s say you’re a travel agency and you want to guarantee your customers that they will receive a full refund if their flights get cancelled due to heavy snows on New Year’s Day, 2008. Simply take out a contract with WeatherBill and it will pay you if there’s enough inches of snow on the ground to cancel flights — that’s what a Canadian travel agency called itravel2000.com has done, a contract that company chose to be worth up to $100 million.

WeatherBill bases its prices on accumulated weather statistics as well as computer-generated models of weather forecasts and longer-term trends.

Hundreds of businesses have bought contracts, typically worth less than a couple million dollars; the company earns between one and 20 percent revenue from its contracts, chief executive David Friedberg tells us.

Weatherbill is growing quickly he says, and is cash-flow positive — most likely because it makes money no matter what. Nephila Capital, a re-insurance fund that normally sells capital bonds, weather derivatives and financial instruments to large clients such as insurance companies, backs 100 percent of WeatherBill’s risk, paying the company in the event customers cash out on large contracts.

Because WeatherBill’s contracts are considered “over the counter financial instruments,” Friedberg says, they are regulated by the US Commodity Futures Trading Commission — meaning that businesses and individuals must have a net worth of over one million in order to purchase them.

Current clients include ski resorts, farms, restaurants, outdoor sports companies, and others.

New Enterprise Associates and Index Ventures led the round, with Allen & Company, Atomico Investments and angel investors participating. Current investors include First Round Capital and angel investors.

Brightcove, a company that gives media outlets and other businesses a platform to deliver online video, has raised a whopping $59 million in a third round of funding.

Amid the trend of consolidation hitting the sector, this funding will help tide the company over. There are oodles of other companies doing something similar, from Twistage, to Reality Digital, vSocial and GridNetworks.

Besides, no one can afford to let Brightcove go under. All kinds of media groups are using Brightcove technology to get online, and they’re investing in it too. They include customers The New York Times Company, and Transcosmos Investments & Business Development, which participated in the latest investment. With so much capital, though, you have to wonder whether Brightcove will ever be able to return a profit on the investment.

AllianceBernstein, Brookside Capital, and Maverick Capital led the latest investment. Other investors include Accel Partners, Allen & Company, AOL, General Catalyst Partners, The Hearst Corporation, and IAC/InterActiveCorp.

We first wrote about Brightcove here.

[Update: Bambi Francisco says the value of the company, after the investment, is $220 million]