Groupon Reportedly Turns Down $6B Google Takeover Offer

By Chris Preimesberger  |  Posted 2010-12-04 Print this article Print

The Chicago-based localized shopping Web service turned down Google's $6 billion buyout offer after apparently deciding that its best move is to remain independent for the time being.

Groupon late on Dec. 3 apparently rejected Google's massive $6 billion takeover offer.

According to Bloomberg News and Chicago Breaking News, the Chicago-based localized shopping Web service believes the best way to proceed is to remain independent.

Google has been in talks for the past week to buy the local retail Website, which sends e-mails to millions of users daily offering discounts from participating providers, based on proximity to those users. Its most recent offer was reported to be just shy of $6 billion.

In his GoogleWatch blog, eWEEK reporter Clint Boulton wrote that "when talk about this Groupon deal started in earnest in October, Yahoo was going to buy it for $1.7 billion. Then, around Thanksgiving, Google was reportedly offering $2 billion to $3 billion for the startup.

"Now things have gotten seriously ridiculous with the twice-sourced detail that the asking price is somewhere between $5 billion and $6 billion."

It had been reported elsewhere that Groupon had been tendered an offer of $5.3 billion from Google that included a $700 million earnout. That's a lot of money for a startup company-or any company, for that matter-to turn down. But there are other considerations.

Groupon may have been influenced by a couple of serious legal concerns. No. 1: Google is being investigated by the European Commission for alleged anticompetitive practices in Europe. Specifically, Foundem, Ciao and eJustice say Google is holding them down in search results.

No. 2: Google is having some trouble closing a relatively small acquisition-$700 million for travel software company ITA Software.

"This is because Expedia, Kayak and others fear Google will shut them or price them out of the market they helped cultivate. The Justice Department is looking into the deal," Boulton wrote.

"With those two issues, Google doesn't need any more heat for anticompetitive practices. If it bids for Groupon now, I can't imagine the Federal Trade Commission or DOJ would take kindly to Google making another power move," Boulton wrote.

Another reason why Groupon said no might be financial-perhaps it can indeed stand on its own.

According to the IT news site AllThingsD, Groupon has been earning about $2 billion in yearly revenue, not $500 million that has been widely reported.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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