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It's interesting that a smart company like Google almost paid $6B for them. Did they not understand the business model well enough or did they just want it t
by acak 15y ago
It's interesting that a smart company like Google almost paid $6B for them.
Did they not understand the business model well enough or did they just want it to bolster other services (like payments) despite it not being profitable?
How Google Offers goes should tell us. Maybe they've found a way to make the model work.
- fragsworth 15y agoOr maybe Groupon declined the offer because they knew they couldn't scam Google once they started their due diligence.
- jimmywanger 15y agohttp://li82-18.members.linode.com/google-deal-said-have-25-billion-reverse-breakup-fee http://li82-18.members.linode.com/google-deal-said-have-25-b... That breakup fee would have been paid right after due diligence.
- suking 15y agoI'm guessing there was some pretty big performance (possibly profit) incentives for the founders and they knew they had no chance of hitting them. So their next option to cash everyone out and make a ton of $ was IPO.
- jimmywanger 15y agoFrom what I heard they were bucking for a breakup payment of 5 billion - that would have been within an order of magnitude of what the Groupon investors would have liked to have.
- suking 15y agoScared of due diligence ya think?
- pbreit 15y agoPaying $6b for a $20-30b company seems smart to me. The Groupon model is insanely profitable once you trim SG&A, sales and marketing (useful for hyper growth, not useful for sustenance).
- blauwbilgorgel 15y agoEven if Youtube is not profitable, Google has gained a lot of power over the online video format (see also Webm), justifying the buy. Google aims to organize all the information in the world. Video is a large part of that and that should only grow. The same take I have on the $6B offer. Controlling a large space of the growing local/group buying market is valuable to Google. And just imagine Groupon coupled with Google Adwords (Adwords could upsell their clientele a Groupon offer) or Google Adsense (temporary offers could show on the entire content network). Or Groupon coupled with Google Base/Google Merchant Center. Or Groupon coupled with Google Maps. The true power would come from the collaborations and the future growth where Google would have secured a place. No matter the hard business model, social buying/local offer sites are clearly here to stay.