Google bid to buy-out Groupon falls through: Report
Internet search giant Google Inc's multi-billion dollar bid to buy out online advertising firm Groupon Inc has fallen through, according to a media report.business Updated: Dec 05, 2010 13:34 IST
Internet search giant Google Inc's multi-billion dollar bid to buy out online advertising firm Groupon Inc has fallen through, according to a media report.
"Google Inc's multi-billion dollar bid to acquire local deals site Groupon Inc ended on Friday as the two sides broke off talks," The Wall Street Journal reported, citing a source familiar with the matter.
It seemed as though the negotiations between Google and Groupon were on the verge of completion at one point of time.
However, Groupon's board of directors -- many of whom are investors in the company -- were unable to reconcile their differences over whether to accept the proposal.
The company continues to remain an independent, privately held firm and plans to come with an IPO in the future, the report noted.
AllThingsD had previously reported that Google offered USD 5.3 billion for Groupon, with a further USD 700 million to be paid subject to Groupon's ability to hit certain performance milestones.
News Corp owns the AllThingsD website, as well as The Wall Street Journal.
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 online market for local business advertising is expected to grow rapidly and is being targeted by other large web companies as well, including Facebook Inc and Yahoo Inc.
Yahoo had earlier put in a bid of its own for acquisition of Groupon, the Wall Street Journal reported, citing sources.
The model has caught on because it improves on the idea of local online advertising, where a business pays money upfront for exposure that will hopefully translate into sales.
With Groupon, merchants don't pay for marketing until they get a customer in the door.
A potential Google-Groupon deal was controversial among Silicon Valley entrepreneurs and executives, with some feeling that the Groupon model could be copied successfully by others and the two companies' cultures might not mesh, among other things.
Google's largest purchase till date is its USD 3.1 billion buy-out of online ad provider DoubleClick in 2007.