Many of you may have heard that Groupon and Google were negotiating for a few weeks but at the end the deal fell through. Groupon refused the $6 Billion offer from Google. Just to give you an idea of how much this would have helped, Groupon cofounders Brad Keywell and Eric Lekofsky may have earned $600 million and $1.8 billion, respectively. So why did Groupon say no?, this would have guaranteed millions of dollars in personal wealth. One source says the view on Groupon's board was that a Google-Groupon merger would draw more regulatory scrutiny than any other deal Google has ever done. Because of the anti-trust investigations Google is going through, the Googled-Groupon may not be allowed to go through and at the end it would take months for them to get the bad news.
According to sources, they verified that Groupon's annual revenues are now at a $2 billion run rate, which is much higher. The $2B figure is the total value of Groupon sold. This means that as of right not they are looking for a bigger pay day that what Google offered originally.
At the same time, Google has been criticized lately for growing too big to innovate, and ironically, this may be a problem that could plague Groupon itself if it opts to sell.
What do you think? Would it make sense for these two companies to join forces?
http://techcrunch.com/2010/12/03/confirmed-the-groupongoogle-deal-is-off/
http://news.cnet.com/8301-13577_3-20023978-36.html
2 comments:
I think the opportunity for Goolge and Groupon to come together is over; at least as far as a formal venture is concerned. In fact, Goolge is in the process of rolling out its own social coupon service called Google Offers.
In addition to Google Offers, Facebook is also in the process of rolling out its own social coupon service called Facebook Deals. Groupon is going to be facing some stiff competition in the near future.
I think the chances of these two companies merging is slim to none. Groupon had their chance when Google was offering them 6 billion dollars, and they made the choice to turn them down. Google is obviously a well-established, successful company and now that they're rolling out "Google Offers" they will be targeting Groupon's market share. And when they have that, they will no longer feel threatened by Groupon. In fact this might potentially affect Groupon's sustainability as a company as a whole.
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