There might be a few different possibilities: * As a basic building block, it gives them an established competitive advantage (mostly branding & engaged vendor

There might be a few different possibilities: * As a basic building block, it gives them an established competitive advantage (mostly branding & engaged vendors) against Facebook Places/Local Deals, meaning Facebook would have less leverage over them in the future. They might be interested in the local aspect of Groupon, specifically with the self service they launched recently. Integrating Groupon into Google Places would give their Places section a lot more meat. * They might be liking the pure revenue that the business could produce. You have to remember that during stockholder conference calls, they get questions like "what is the next billion dollar product for Google?" from analysts and Groupon is printing money right now (according the hear-say reports that have been covered in media.) * Google has stayed completely self-service on the sales side of things. Groupon has a large sales staff from what I hear. One possibility (though slightly far fetched) is they might use their experience with successfully managing the Groupon sales staff to ramp up a sales team for Google Apps for the enterprise market.