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Beanstalk's Internet Marketing Blog

At Beanstalk Search Engine Optimization we know that knowledge is power. That's the reason we started this Internet marketing blog back in 2005. We know that the better informed our visitors are, the better the decisions they will make for their websites and their online businesses. We hope you enjoy your stay and find the news, tips and ideas contained within this blog useful.


December 13, 2010

“As the Groupon Turns” – Groupon Snubs Google Buyout

Since the first rumoured whisperings of a buyout offer from Google to purchase the “Fastest Growing Company in History” (http://www.forbes.com/forbes/2010/0830/entrepreneurs-groupon-facebook-twitter-next-web-phenom.html), the web has been abuzz with speculations as to how much Google would offer, what this would do for Google, and what it will do to Groupon. The deal has had as many twists and turns as a tired television soap opera.

The fact that Groupon might actually decline the offer of $5.3 billion never really occurred to anyone. With gross revenue of $800 million, Google’s buyout price seemed a more than substantial offer to make it worth their while. Groupon’s rejection of Google shocked many in internet business and blogging communities alike who thought Andrew Mason (CEO of Groupon) must be daft to reject such an offer. This has lead to even more scuttlebutt with the rest of us scrambling to figure out what happened.

Some speculations are that Groupon may still be at the negotiating table with Google. Marissa Mayer, (Google’s VP in charge of search and the user experience) was heard to remark at a conference that “the larger the company, the more complicated the deal is” …and the longer it takes.

Some were not surprised at all by Groupon’s decline of the offer. Tech insider, Ron Conway, wasn’t shocked. “No, not really,” Conway says. “Andrew is a powerful entrepreneur.” And on those lines Mason stated that “What we’ve done so far at Groupon is just the beginning.” Implying that with Google out of the picture, the company is free to continue its unprecedented growth. Where it will stop is anybody’s guess.

Many have speculated that Groupon walked away from Google because the Chicago company wanted to preserve its own culture, continue building its own story and pursue its own IPO (Initial Public Offering) in 2011 and was also concerned about its employees keeping their jobs with the acquisition.

One site (http://www.nbcbayarea.com/news/tech/Googles-Ring-May-Not-Have-Been-Shiny-Enough-for-Groupon-111595789.html) suggests that it may have been Google’s overpowering personality that forced Groupon to walk away from the negotiating table. But some analysts are beginning to wonder if there is any truth to the report that the much rumoured Google takeover of the hyper local coupon site was foiled by a cash promise if the relationship went south.

Still another thought permeating the blogosphere is that the deal was cancelled due to Google’s unwillingness to offer enough security to help offset potential legal antitrust issues that could arise from such a purchase.

A Silicon Valley source told Forbes (http://blogs.forbes.com/christophersteiner/2010/12/08/why-groupon-dumped-google-is-the-government-to-blame/?boxes=Homepagechannels) that Groupon was likely asking for a breakup guarantee from Google that the search giant would have to pay Groupon if, in the end, a Justice Department or FTC inquiry broke up the acquisition. Google simply may not have been willing to potentially sacrifice up to $1 billion for nothing. But there’s nothing stopping Google coming back to Groupon’s board with a bigger breakup fee to sweeten the deal either.

So what happens now?

Will Google find happiness with another partner (perhaps livingsocial.com or buywithme.com) and continue with its plans for local market domination?

Will Groupon hold out for more money? Or will they lead us to believe that business can have the morals and ethics to stand against the almighty dollar to become a shining beacon of hope to the world?

And what about the mysterious stranger lurking in the shadows called “Yahoo”?

SEO news blog post by @ 6:34 pm

Categories:Google

 

 

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