Google to buy Groupon for Six Billion Dollars?

Posted on December 2, 2010

 

Tis the season to be merry and spend lots of money on gifts, and all that. Google is getting right into the Christmas spirit if the New York Times is to be believed. The NYT claims that Google is about to splash out a figure in the region of $6 billion for the website Groupon, even though the site only launched in 2008… and who said there weren’t still great moneymaking ideas to be had online?

Should Google actually pay $6 for Groupon it would be nigh on twice what it paid for the analytics company DoubleClick back in 2007.

grouponSo what is Groupon, and why is it tempting Google to get out its cheque book and spend more money than it has ever spent before?

Well, first off Groupon makes in the region of $50 million per month… now you can see why it has Google’s attention. Groupon is a money saving website that sends out emails to subscribers offering them ‘deals of the day’ with businesses local to them. Subscribers can save as much as 90% on regular prices on services such as their local hairdressers, or even a trip to the zoo. Groupon makes its money by splitting the revenue with the businesses in question, generating the aforementioned $50 million per month.

Groupon was founded at the end of 2008 (so is just over 2 years old) and took advantage of people’s need to save money during the onset of the recession. It has a reputed 33 million subscribers in its database. In addition to the US, the site is also available in as many as 300 different markets across the globe, including Europe.

The New York Times claims Google has bid $5.3 billion, and offered a further $700 million depending on targets being met.

Only this week Groupon expanded its network of websites by moving into markets in Taiwan, the Philippines, Hong Kong and Singapore. Rob Solomon, the COO of Groupon, said about his company’s recent acquisitions:

“We see enormous potential in the Asian marketplace, and the expansion of Groupon to Hong Kong, Singapore, the Philippines and Taiwan is an important next step. We’re excited to leverage an incredibly Internet-savvy customer base to generate increased sales for local merchants.”

One possible way that Groupon could be integrated into Google is through Google Places, which could make use of Groupon’s new ‘Merchant Store’ feature. This would allow Google to offer ecommerce options for businesses direct from their Google Places page.

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