Google is understood to have offered to buy Groupon for US$5.3bn with US$700m earn-out terms, according to the latest rumours surrounding what could turn out to be Google’s largest acquisition yet if it succeeds.
According to Kara Swisher of BoomTown, sources have said a deal between search giant Google and the fast-emerging Chicago-based social buying site has been struck.
The move would put Google in pole position in the fast-emerging local-buying e-commerce market, as well as reveal intimate local buying data.
While most people would gawp at such a steeping buying price, remember Google has more than US$33bn in cash at its disposal.
Its largest acquisition to date has been DoubleClick for US$3.1bn in 2008 and before that YouTube for US$1.6bn.
Recent Google acquisitions
Chicago-based Groupon – a play on the words "group" and "coupon" – was formed by its CEO Andrew Mason and kicked into motion when its former employer Eric Lefkofksy invested US$1m seed money in the venture.
The site brings business directly to the door of local businesses.
It does so by using the web to enable groups of individuals to buy products in bulk. The site makes a daily offer to each and every community in the 230 markets it is active in. If a certain number of people sign up for the offer, then the deal becomes available for all.
The site has more than 20 million subscribers and plans to serve 300 cities worldwide by year’s end. The company has introduced seminars and a training programme for merchants who have reported they have been overwhelmed by the amount of business the site has sent their way.
Buy your tickets now!