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Google in $6-bn Groupon buy?

business Updated: Nov 30, 2010 22:37 IST
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Google is near a deal to acquire Groupon, the pioneering online discounter, for as much as $6 billion, people with direct knowledge of the matter said on Monday.

A deal, in the $5 billion to $6 billion range, could be struck as soon as this week, these people said, cautioning that the talks still could fall apart.

At that price, Groupon — known for its daily discounts — would be one of Google's largest acquisitions, even dwarfing Google's $3.1-billion acquisition of DoubleClick in 2007.

The acquisition would also be Google's boldest foray into local business online advertising.

A representative for Google declined to comment. Andrew Mason, Groupon's chief executive also declined comment.

Since its founding in 2008 by Andrew Mason, Groupon has been growing at an unprecedented pace. The company, whose name is a combination of “group” and “coupon,” specialises in providing customers with discounts purchased in bulk. Subscribers receive notifications of one deal a day, tailored to their location and profile.

The average Groupon deal offers between 50% to 90% off retail goods and services, from restaurant certificates to sky diving lessons. It has grown beyond local merchants to encompass national retailers like the Gap. (On the day of the Gap promotion, Groupon sold 440,000 units and generated $11 million in revenue.)

Groupon's success has helped turn the company into a cash-generating machine, reaping more than $350 million in estimated annual revenue.

Google and Yahoo were among Groupon's top suitors, with the latter prepared to pay $2 billion. But Groupon's founders rejected the approach as too low.