Groupon spurns Google: Bad move or brilliant?

Groupon spurns Google: Bad move or brilliant?

Summary: Groupon will reportedly decide to turn down an acquisition offer from Google and time will tell if the move is brilliant or insane.

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Groupon will reportedly decide to turn down an acquisition offer from Google and time will tell if the move is brilliant or insane.

According to the Chicago Tribune, Groupon has decided to turn down an acquisition offer from Google, which was rumored to be offering $5 billion to $6 billion for the company.

Instead, Groupon will decide whether to go public in 2011.

The threads in this Google-Groupon saga are fascinating---especially since there's such a large sum of cash involved.

Is Groupon's decision to turn down Google bad or brilliant? Two thoughts:

  • From a tech and Web innovation standpoint, it's heartening to see Groupon turn Google down. If the big guys gobbled up every company that could be a threat innovation would slow. The playbook is simple if you're Google or any other large player. Allow startups to accelerate only to the point where they aren't a big threat. Google and Groupon could have been a local commerce match made in heaven. Now Groupon could become a big e-commerce player and maybe rival eBay or Amazon.
  • But the dollars are ridiculous. Would you rather have $5 billion to $6 billion today or roll the dice for a larger payday (and potentially change the world) tomorrow? Tough call. If Groupon goes public, Kara Swisher puts Groupon's revenue at a $2 billion run rate, it may be able to garner a market cap much higher than $6 billion. Google could always come back to the negotiating table. The other side of that equation is Groupon could fumble and be like Digg, a company that rejected takeover overtures and is now forever in the "would of, should of" category.

Of course, Groupon's fate could rest somewhere in between those two extremes, but it's one helluva coin flip to ponder.

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Topics: Banking, Browser, E-Commerce, Enterprise Software, Google

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9 comments
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  • RE: Groupon spurns Google: Bad move or brilliant?

    6 billion seems insane but Groupon has made some good moves in expanding and is pulling away from the pack. There are hundreds of smaller competitors and they all operate in pretty much the same manner... but none with the reach and clout that Groupon has. Still, takes some guts to walk away from that kind of money!

    If you like daily deal sites (like I do), LocalDealSites.com lists over 130 Groupon-like daily deal websites and lets you filter by city so you can see which sites have offers in your area. http://www.localdealsites.com/
    cogrep
    • RE: Groupon spurns Google: Bad move or brilliant?

      @cogrep - Actually, Groupon rejection to Google is a good and brilliant move because the market acquisition is very much high already, so there is no need for any unwanted move. <br><br>Groupon with advanced features has registered a vital player in daily deal platform but it can use Google advertising network to market the products because at present, the advertisement is only through e-mails. <br><br>There are so many clone scripts of Groupon available in the market to help start-up businesses. Some of them gives much more excellent features than the original version.

      More information: http://www.agriya.com/groupon-clone
      fathima akthar
  • &quot;Have&quot;, not &quot;of&quot; Larry..

    Generally, I'm not a grammar Nazi (and I even condemned one earlier this week), but "Would of, Should of" is just hard to look at dude.
    Playdrv4me
    • RE: Groupon spurns Google: Bad move or brilliant?

      @Playdrv4me

      Hey, look on the bright side. We did not have to see "Would uv, Should uv"
      ctunk
  • SocialSpoils.com could kill all ...

    SocialSpoils.com, a deal aggregator for local city deals is in an enviable position that could dwarf all Local City Deals providers. I have unsubscribed from all emails from all these providers, check SocialSpoils.com daily once, and shop the best deals. That's it. No spam mails, no stupid stuff. All deals at one place.

    Eventually the margins for this will be eroded down to 10%. It is simple to come with a competitor who instead of taking 50% cut, could take only 5 to 10% cut and kill Groupon over the time. It's simple. Groupon has made a blunder of magnitude, by not taking the money. Google was desperate to have a story even to make an offering like this. I think Google's growth steam has run out and it is looking desperate quarter after quarter now!
    deals101
  • GOOD, I'm tired of buyouts being the goal

    Seriously, I am tired of startups whose only goal is to be bought out. I applaud these folks for being real businessmen with the desire to manage and grow their business. I wish them nothing but the best.
    NoAxToGrind
  • RE: Groupon spurns Google: Bad move or brilliant?

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  • RE: Groupon spurns Google: Bad move or brilliant?

    Confirming lots of speculation, a source close to Groupon board members stated that anti-trust concerns ultimately forced Groupon to turn down Google's $6 billion offer. They basically feared being under such close regulatory scrutiny would result in a loss of creative control. It's been a smart move by Groupon so far, I just found a great deal on a nice <a style="text-decoration: none; color: gray;" href="http://www.dressinggownsandrobes.com/">dressing gown</a>.
    pctech305
  • RE: Groupon spurns Google: Bad move or brilliant?

    What's my opinion groupon made bad decision. If they agree Google's approach, now they are world's no1. But, now a days groupon sales going low compared some other daily deals sites like livingsocial, Google Plus. Now a days yipit is getting popular, that is aggregating the all website deals. So, lots of peoples spend their time in yipit only. Some companies are developing yipit clone script like http://www.roamsofttech.com/Yipit-Clone-Script/.
    aldenalex05