The Groupon and Google deal has been on the news the past weeks, where Google plans to buy Groupon at the price of $6 billion. Well now the decision has been made: The deal is off—Groupn rejected Google’s offer. People would say “What was Groupon thinking??? Google’s is the ONE buying them for crying out loud!” Well, the deal-of-the-day webiste doesn’t think that way, this is according to sources that know a lot about the deal.
First off, Groupon is a deals-of-the-day website where it offers one “Groupon” per day in each of the market or state it serves. There is only one goal for that “Groupon”: if a certain number of people signs up for the offer, the service/deal becomes available to the public. If not, then no one gets the deal. They started out in Chicago, and then expanded to New York, Toronto and Boston. They already have 150 markets in the US and 150 in Asia, Europe and South America. As of 2010, they have a projected annual revenue of $2 billion.
The reason for the rejection is because they wanted to stay independent for the time being. There might also be the possibility of an initial public opening (IPO) where they can offer stocks or shares to the public, but this decision has yet to be made by Groupon around next year.
This decision came quite a shock as many believed they would accept the offer and would make them a lot of money. Google had been eyeing Groupon for a long time because the search engine company has been pursuing local search advertising. Since Groupon has relationships with small business all over the country, it would be easier for Google to work on this kind of advertising. Recently, Google had little success in reaching out to local businesses and Groupon could’ve been their savior.
There are other speculations why Groupon rejected Google’s offer. Groupon is growing company now and is having big revenues since they started as a small company in 2008. Aside for theIPO, it could be eyeing to expand more to other places without a big company holding onto them. After all, Groupon is growing bigger and bigger throughout the years.
In terms of getting their comment, the spokerperson of Google has said that it will not comment on rumor or specualtion. Groupon, on the other hand, could not be reached for comment but they are expected to speak up on Monday. For now, we have to watch out for more news on this issue.
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Tags: Groupon and Google Deal, Groupon and Google Deal 6 billion dollars, Groupon and Google Deal update
