Reports: Groupon Turns Down $6bn Google Buyout Bid

Groupon late on 3 December apparently rejected Google’s massive $6 billion (£3.8bn) takeover offer.

According to Bloomberg News and Chicago Breaking News, the Chicago-based localised shopping web service believes the best way to proceed is to remain independent.

Local retail

Google has been in talks for the past week to buy the local retail website, which sends emails 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 $6bn.

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 $1.7bn. Then, around Thanksgiving, Google was reportedly offering $2bn to $3bn for the startup.

“Now things have gotten seriously ridiculous with the twice-sourced detail that the asking price is somewhere between $5bn and $6bn.”

It had been reported elsewhere that Groupon had been tendered an offer of $5.3bn from Google that included a $700m 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.

Competition concerns

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 – $700m 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 $2bn in yearly revenue, not $500m that has been widely reported.