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Isn't the "social proof" for a lot of investors the supposed $6B buyout offer they rejected from Google, last year? Was Google just way off in their valuation?
by heyrhett 15y ago
Isn't the "social proof" for a lot of investors the supposed $6B buyout offer they rejected from Google, last year? Was Google just way off in their valuation?
Remember all those stories about how Youtube was just a huge liability, and they were burning through bandwidth expenses, and it was so stupid for Google or anyone to buy it?
- imjustatechguy 15y agoBeing part of Google changes things as (1) Google can finance a money losing operation for quite some time and (2) Google offers integration into its huge ecosystem, especially its existing robust advertising network. Thus Google brought a lot to the table in such acquisition which would increase Groupon's value.
- raganwald 15y agoThis is the most insightful and concise thing I've read about the Google proposal so far. Google offering B$6 doesn't mean Groupon is worth B$6 on its own, it means it's worth B$6 to Google. Google is not Warren Buffet investing in the hope of a passive but safe return on investment. Google was betting that Google + Groupon was worth more than Google + B$6.
- clobber 15y agoHave to keep in mind that the 40%+ that Groupon spends on marketing and customer acquisition largely goes to Google in the form of AdWords spend. Google still wins because of all they make from Groupon from AdWords.
- veyron 15y agoYou mean Google - B$6 + Groupon > Google or Google - B$6 + Groupon > Google - B$6 + investing in other ideas or companies
- raganwald 15y agoI wrote something along those lines originally, but it seemed simpler to leave the details out. I trusted HN readers to fill in the rest :-)