So far, despite a day of speculation around “sources close to the deal”, no one has been able to confirm that Google is, in fact, buying Groupon, the volume buying group that makes aggressive deals and sales available to its subscribers. Some reports claim that Google has already agreed to purchase the company for $2.5 billion, while the New York Times speculates that Google may be willing to spend upwards of $6 billion to acquire Groupon. Any way it goes, skeptics and regulators aside, this deal could be a key to Google’s growing taste for diversification (and a money-making machine).
ZDNet’s Larry Dignan first commented on the ongoing Google-Groupon rumors a couple weeks ago, noting that
Google is your local yellow pages in many cases. Now let’s layer Groupon into the equation. You find that restaurant on Google, you get a nice map for directions, you get a few reviews and you can hand out a coupon for drinks or some discount…For Google, Groupon would be very sticky. And Groupon brings a dash of social networking into the equation. For Google, Groupon is another hook into local commerce and advertising—and a damn good one at that.
Google’s recent rollout of their Boutiques site made it clear that the company is willing to substitute actual human beings for straight algorithms when it can drive search and bring stickiness to its sites (something that Google is sorely lacking compared to sites like Facebook). Boutiques also demonstrated that, while Google’s core business is search, when e-commerce sites like Amazon can step into the search business, Google can make drastic moves to ensure its dominance.
Groupon also brings something something potentially far more valuable to Google than even some slick local search and advertising opportunities. While ZDNet’s Tom Foremski posits that Groupon’s top-notch sales team would be a poor fit for a company of engineers, I’d suggest just the opposite.
Yesterday I noted that Google had an outstanding market opportunity in the tablet space that it probably wouldn’t exercise for a variety of reasons. However, a crack team that knows how to not only sell to consumers but also to build partnerships with businesses of all sizes could make Google phones, tablets, and TVs a reality.
Better yet, for a company that has failed to exert any pressure on carriers or device manufacturers and ended up with a seriously fragmented platform, a group of people who specialize in business partnerships just might be able to address some of the few shortcomings in Android.
This deal has generated a lot of buzz not only because of its potential size but because of the possibilities it raises. And, of course, because the FTC will be taking a very close look at a possibly $6 billion deal that would put Google front and center in the localized commerce market.
