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This past weekend, Michael Arrington reported that Thoof, an Austin, Texas-based social news site, took a dirt nap. It shouldn’t come as a surprise to our readers. Stacey had the scoop way back in January that the company started by Ian Clarke (one of the founders of Revver) was up for sale.

Thoof wanted to create a Digg-like service by observing people’s click streams. The company raised some seed funding from Austin Ventures and others and hit its peak (in terms of traffic) in October 2007 before it began slip-sliding away into oblivion. Thoof’s web site now redirects to Reddit, one of the popular social news sites that’s owned by CondeNast.

Given that the company was up for sale for about six months, I would say it’s just the latest example of the fact that Web 2.0 remains a buyers’ market — not a good sign for tens of dozens of companies that have cropped up across the web. The buyers remain pretty disinterested — even Yahoo is still busy dealing with its own mess. Microsoft is too distracted to do anything, and while Google and AOL are buying stuff, both of them are being highly selective.