Google, looking to expand into local advertising, is offering online coupon site Groupon a $6 billion buyout.
Google Sets Its Sights High
Technically, the offered price is $5.3 billion plus a $700 million earnout, which is money that Google will hand over in the future depending on Groupon’s performance after the acquisition. If the deal goes through—and it’s expected to be settled this week—it will be Google’s largest acquisition to date.
Breaking Into The Local Market
According to All Things Digital, the power in Groupon lies in its extensive advertising and marketing data about consumers around the world. Google, looking to get a stronger hold on local advertising, had previously tried to purchase Yelp, the customer review site. The deal never came to pass, and now Google has turned its attention to Groupon, which brings in over $50 million in revenue each month.
Yahoo Fell By The Wayside
The New York Times reports that Groupon, which has over 12 million registered viewers, has been of interest to both Google and Yahoo, who proposed a payment of $2 billion that was rejected by the smaller company not only for its lesser sum, but because Groupon looked to ally itself with the stronger company: Google.
Can Google Improve Groupon?
Groupon is lauded as both a dream for the customer, offering 50% to 90% off with group deals, but bemoaned by the small business owner, who attracts many new customers but suffers extreme monetary losses during the deal. If the deal does go through and Groupon joins the Google empire, perhaps the Google geniuses could address that issue, and make Groupon deals a good thing for everyone involved.
Tell us in the comments: Do you use Groupon?