Google Mum About Buying Groupon for $2.5B

Google has allegedly acquired Groupon for $2.5 billion, giving it a major weapon in the local deals war with Yahoo, Facebook and other Internet powers.

Google has allegedly acquired local deals startup Groupon for $2.5 billion, which would mark the company's second-largest acquisition, after its $3.1 billion DoubleClick deal.

VatorNews cited an "unnamed insider" confirming the deal, though Google declined to comment "on rumor or speculation" for eWEEK.

Groupon, with 20 million subscribers and a $1 billion valuation, did not respond to eWEEK's request for comment as of this writing.

TechCrunch uncovered evidence that Neeraj Arora, who leads Google's mergers and acquisitions activity, and Groupon CEO Andrew Mason, were quite chatty on Twitter about something.

Groupon offers users daily deals and discounts based on their location. For example, when users sign up and offer their location, they receive offers in their e-mail inbox.

Today's offer for New York City-based subscribers, for example, was for the chance to buy $40 worth of books from Simon & Schuster's online Webstore for $20.

Users print up the vouchers or call them up on their mobile devices and bring them to participating stores to claim their deals. Users may share these offers with friends via e-mail or through Facebook and Twitter.

While VatorNews offered no more details, it managed to rekindle rumors last touched off by All Things Digital on Nov. 19 when the blog said Google offered $2 billion to $3 billion for the startup.

At the micro level, Groupon would tuck in well with Google's recent e-commerce efforts. Google on Nov. 17 launched, a shopping comparison Website that leverages machine learning and computer vision to help users find and buy clothes and shoes online.

Two days before that launch, Google unveiled an improved Google Product Search service, partnering with retail giants such as Best Buy and Williams-Sonoma to surface goods for online shoppers who are nearby.

At the macro level, Groupon would boost Google's local search efforts to keep people visiting its properties and seeing or clicking on ads.

Google may have competition from other suitors. All Things Digital reported in early October that Yahoo was negotiating its own deal to buy Groupon for $1.7 billion, but Groupon ultimately backed out of the deal.

There's no doubt the local offers space is heating up, buoyed by holiday sales on, eBay and other e-commerce Websites in the wake of Black Friday and Cyber Monday.

Yahoo at the Web 2.0 Summit on Nov. 16 unveiled Yahoo Local Offers, which offers Groupon-like service, with Groupon as a partner. Facebook meanwhile launched Facebook Deals on Nov. 3 to throw its hat in the location-based shopping ring.