Google buys Groupon for $2.5bn, according to a report
It isn’t confirmed yet, but VatorNews is reporting that Google as tipped over the last couple of weeks has bought US deals website Groupon for $2.5bn.
The price is lower than some of the moonshot type figures that have been bandied around over the last week with some saying that the price could go as high as between $3bn to $5bn.
VatorNews quotes a Google insider and says that while neither Google nor Groupon have officially commented it says its “source is reliable and the report falls in line with the recent string of Groupon acquisition rumors”.
The sale rumour follows Groupon, which trades as MyCityDeal in the UK, last week talking about why companies like Google are willing not shell out big bucks to acquire it.
Groupon UK managing director Chris Muhr said the business could be a great addition for Google particularly in relation to its Ad Words business.
“Think about Google Adwords … if they had local business for example. Type in a keyword in Google, say ‘bar’. You find a bar in your area. Google then puts up this kind of bubble box that says this is the business and here is the address.
“But that is it. It does not have direct contact with the business. The business does not come back and say I want to attract customers via that search. Most of the time the customer does not convert from there into an actual customer.”
The price is very close to the reported $2.5bn to $3bn Yahoo! is said to have offered to pay for Grouponearlier this year. Those talks came to nothing.
Now enter Google which can not only easily afford such a price, but it would make the first significant investment it has made in sometime if the story is correct.
Deals – why Foursquare and Gowalla are stumbling and Groupon is soaring
All Comments
Isn’t it more of an effort to fight FB on all (social)fronts including social buying.
If true, this buys Google straight into the local digital vouchering space in a way that their ‘Tags’ feature in Google Maps has only managed to do in a limited way. Their next challenge is to turn Groupon’s offer to be relevant to businesses other than those willing or able to forego over 50% of their normal price to take part, and to ease the backlog of participating companies. I think it’s a very good fit for Google’s business, and one that should benefit local marketers.
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