Hopefully they’ll come up with a better name than that …
Ask around the techie water-cooler what the hot topic of the day is and you will hear about the apparently imminent move by Google to acquire the online mass coupon vendor, Groupon.
The deal could be worth a staggering $5-6 billion USD and could happen as early as this week. While the buyout amount is a matter of some debate, leading analysts are considering it a good move given the potential of local advertising revenue. Earlier this year, Yahoo was rumoured to have offered over $3 billion to acquire the company.
For those of you not sure who/what Groupon is, they are a “deal-of-the-day” website, localized to major geographic markets in the US and Canada. The company offers one “Groupon” per day in each market that it operates in – up to a set number of coupons purchased. Naturally, Groupon takes a cut of the deal from the retailers. This business model is attractive for any size of business as it reduces the risk for retailers as the coupons can be regarded as “quantity discounts” and also makes for very effective marketing and sales promotion tools.
Current CEO Andrew Mason launched the site in 2008 after acquiring several similar companies such as MyCityDeal, Qpod.jp, ClanDescuento, and Darberry.ru. After only two years in operation, the company has over 20 million subscribers, projected revenue of $500 million for 2010 and is currently valued at over $1.35 billion.
While nothing has been officially announced as yet, all one has to do is to look at the recent implementation of the recently launched “Google Places” service. The service is designed to promote and attract Google users to geo-specific markets for products and services. It would appear that perhaps Google has been planning the acquisition of Groupon for some time. Taking a look at the Google Places launch page, you can see that they already have a “coupon” area, making the implementation of the “Goopon” very seamless.
What does this mean to you and me? This writer sees it as another business-savvy step by Google to keep providing its users with value-added services. This is the reason why Google are the corporate giants they are, and will continue to dominate the market for many years to come.