We have known for a few weeks now that Groupon and Google have been in talks, but not exactly what they’ve been talking about. Now rumors are surfacing of a possible acquisition of Groupon by Google for quite a hefty sum. The critical-mass coupon service which takes advantage of crowd interest to allow businesses to offer deeper discounts has become extremely popular in every city it’s set its eyes on.
VentureBeat peels back some of the hype surrounding this rumor and talks over a little bit of the pricing situation,
Neither company has confirmed the news yet, and we’ve sent in our own inquiries regarding the deal. All Things Digital reported a few weeks ago that Google and Groupon were in talks, which sparked countless follow-up rumors. At the time, we argued that a Google buyout would be terrible for Groupon because the search giant lacks a human touch.
Still, a Google/Groupon union makes sense. Groupon is the largest, and most well-known, daily deal site on the web — it was valued at over $1 billion following a large round of funding in April. Just like how Google’s $1.65 billion YouTube purchase makes more sense now than it did in 2006, purchasing Groupon could easily pay off for Google down the line. It’s also clear that Google is getting more interested in online shopping now, having recently launched the fashion site Boutiques.com.
I am in agreement here, the $2.5 billion price-tag does make sense; but only recently Groupon had been aiming for a valuation at $3 billion with their most recent round of investments.
Google’s acquisition may also put them further into legal crosshairs. Over at All Things D there’s some speculation about how this might affect the attention of regulatory organizations—who have already been squinting at Google over the search giant’s unprecedented growth in reach. “Those opposed to the acquisition, on antitrust grounds, contend that Google would control travel search in a way that would inevitably invite abuse,” All Things D mentions, and the truth is that governments are already looking into the situation.
Commerce from the personal level to the business level runs the world and as an information and search broker, Google is in a perfect social position to make extremely good use of a system like Groupon. With the number of people visiting their search engine and the ability to target advertisements locally and by interest, tying the two together would deliver an unprecedented ability for businesses to reach clusters of individuals rather than just singletons.
The crowd-coupon service in Groupon does look extremely tasty and it’s a good time for Google to reach out and snap them up. We’re certainly going to have see to updates to the Google acquisition chart as they advance.
