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    Groupon Reportedly Turns Down $6B Google Takeover Offer

    By
    Chris Preimesberger
    -
    December 4, 2010
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      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 Google.com 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
      https://www.eweek.com/author/cpreimesberger/
      Chris J. Preimesberger is Editor Emeritus of eWEEK. In his 16 years and more than 5,000 articles at eWEEK, he distinguished himself in reporting and analysis of the business use of new-gen IT in a variety of sectors, including cloud computing, data center systems, storage, edge systems, security and others. In February 2017 and September 2018, Chris was named among the 250 most influential business journalists in the world (https://richtopia.com/inspirational-people/top-250-business-journalists/) by Richtopia, a UK research firm that used analytics to compile the ranking. He has won several national and regional awards for his work, including a 2011 Folio Award for a profile (https://www.eweek.com/cloud/marc-benioff-trend-seer-and-business-socialist/) of Salesforce founder/CEO Marc Benioff--the only time he has entered the competition. Previously, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. He has been a stringer for the Associated Press since 1983 and resides in Silicon Valley.

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