News media outlets are now reporting Google and Groupon have ended talks over a deal where the Web search giant would have bought the online deals site for up to $6 billion. The New York Times reports: "Google was eager to purchase the fast-growing start-up, based in Chicago, raising its bid at least once during negotiations."
The NYT report continues: "Although two people briefed on the matter expected Groupon to ultimately approve the deal, the sides had to work through several sticking points. Groupon’s subscriber network has expanded to 35 million users in 300 markets in North America, Latin America and Europe. It is pulling in more than $1 billion in annual revenue. . . . During discussions, estimates of Groupon’s revenue continued to rapidly climb, weakening the value of Google’s offer."
The All Things D blog previously reported that Google offered $5.3 billion for Groupon, with a further $700 million to be based on Groupon's ability to hit certain performance milestones, The Wall Street Journal says in its report. Web portal giant Yahoo also pursued a deal with Groupon, the WSJ says, adding: "Groupon, a closely held company based in Chicago, has grown rapidly by getting local businesses to spend money online to attract consumers, a market Google has sought to crack."
'The Zuckerberg Gambit?'
The Chicago Tribune was first to report that deal talks had failed. Citing a source it did not identify, the Tribune says: "Groupon still may choose to pursue an initial public offering but will not make a decision about going public until 2011."
All Things D's Kara Swisher says Groupon's walking away from the deal is what she calls "The Zuckerberg Gambit," a reference to Facebook Founder Mark Zuckerberg's flip-flopping on deals he entertained for the social network goliath.
Groupon grew out of a website called The Point, a website launched in November 2007.
Earlier: Read Gannett Blogger comments when talks first surfaced
The All Things D blog previously reported that Google offered $5.3 billion for Groupon, with a further $700 million to be based on Groupon's ability to hit certain performance milestones, The Wall Street Journal says in its report. Web portal giant Yahoo also pursued a deal with Groupon, the WSJ says, adding: "Groupon, a closely held company based in Chicago, has grown rapidly by getting local businesses to spend money online to attract consumers, a market Google has sought to crack."
'The Zuckerberg Gambit?'
The Chicago Tribune was first to report that deal talks had failed. Citing a source it did not identify, the Tribune says: "Groupon still may choose to pursue an initial public offering but will not make a decision about going public until 2011."
 |
| Zuckerberg |
Groupon grew out of a website called The Point, a website launched in November 2007.
Earlier: Read Gannett Blogger comments when talks first surfaced
Guess I'm one of the non-visionary gannettiods.
ReplyDeleteI just don't see the upside here.
They offer one deal per day per market.
I looked at six markets and two had the same national internet store as the deal. None of the sites had more than a 100 deals sold.
A good business sure, but $6 Billion??
I also thought Groupon didn't shake my tree. But then I took a second look and noted how it is structured. You are buying these coupons, so you are the ultimate customer stores want, which is a committed buyer even before you enter the door.
ReplyDeleteNewspaper coupons don't operate this way. You clip them out then take them to the store and see if you really want to buy the product. You are not committed.
Something seems to be working here because Groupon is getting $500 million in revenues each year, and is priced nearly twice the value of GCI.
Give away ads for free? GCI's green-eyeshades would never consider such a plan, which would undermine what is left of newspaper advertising.
ReplyDeleteThe Groupon idea is get revenue only when the coupons are sold, not for running them. They get a cut of the downpayment. So will car dealers demand repayments when their ads don't bring in customers? Will supermarkets get a refund when shoppers turn their noses up at toilet tissue specials? Give away ads. What a truly silly idea.
We are already giving away news stories for free. Might as well give ads away, too.
ReplyDeleteGroupon SUCKS!! No deals here, just more junk e-mail. I'm ready to add it to my blocked list.
ReplyDelete