Groupon shuns Google's $6bn takeover bonanza
What? You want my kids to starve, is that it?
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Groupon walked away from acquisition talks with Google late last week, after speculative reports suggested that the world’s largest ad broker was willing to splurge up to $6bn to buy the e-commerce coupon outfit.
According to the Chicago Tribune, which cited sources familiar with the matter, Groupon turned its back on Google choosing instead to stay independent.
It’s understood that Groupon, which expects sales of at least $500m this year, may pursue an initial public offering in early 2011.
Bloomberg reckoned that Groupon's decision to reject Google’s takeover approach also shows that it could be holding out for an even bigger valuation of its website property.
The Chicago-based company failed to agree a $2bn-$3bn takeover deal from Yahoo! when the web portal was sniffing around the site earlier this year.
Facebook famously rejected an offer from Yahoo! in 2006, and the holdout paid off for Mark Zuckerberg’s social network. It remains to be seen if Groupon, which has 35 million users and 3,000 staff worldwide, can push up its valuation by being very picky indeed about the price tag. ®
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COMMENTS
That is why I could never create a company
If I ever had a successful company, any 8-digits offer would probably have me asking where to sign...
And these guys refused a 10-digits offer.
How I will ever get a job with so little ambition?
Groupon can be done better, for a lot cheaper and less evil
Groupon is going to have to change or they will fail.
Right now they have some suckers willing to cough up a whole lot for the rights to
sell things at a small percentage and keep an even smaller one. As time goes on, someone
will come up with their own site and offer the same service for less.
It's like those coupon books they used to push hard. They got people to pay for the right to
include their coupons in a coupon book, then they also managed to get people to buy the
coupon books. Thing is, I don't see them around anymore since it did not make enough
sense to either the potential customers or the businesses.
They must have a heck of a salesforce to convince businesses to let groupon keep 50% of
the sales AFTER the price was already slashed. The only way it would make sense is if they
managed to develop a significant percentage into long term customers or if they were so
overpriced to begin with that they at least break even after getting perhaps 25% of the list
price.
So, while groupon looks a bit juicy with their cash flow (I have no idea what their costs and debts are) it would be far cheaper to simply create their own site, offer it for a less evil piece
of the action, which would likely drive enough traffic to make more profit anyway.
They can learn from groupon and do it better.
Go ahead and pay 10-12 times real earnings (not gross sales) if you must jump into it,
otherwise be patient and build a better creation without the pitfalls from dealing with their
evil past actions.
Evil being defined as that the only company that really makes out on the deal is groupon.
Dumb and dumber
Are they kidding? I don't know who's dumber, Google for offering that much, or Groupon for turning them down. They're about to get seriously marginalized by a number of competitors.
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