How does Groupon work? Groupon is an online business that specializes in offering its’ customers really good deals to restaurants and services around the country. Why would Google acquire Groupon? As referenced from a New York Times article by Evelyn M. Rusli and Claire Cain Miller, Google is not officially publicizing about the possible purchase of Groupon. An estimated deal of $5 to $6 billion is in the works; however, the deal could still fail. If Google proceeds with the deal, this would be their largest payout. The second was to its 2007 purchase of DoubleClick, an online advertising company, for $3.1 billion. Groupon is a good way for people to experience something new and exciting and without paying full price. With the current recession, people are more willing to go out maybe once a month to treat themselves and why not a better way than to buy a heavily discounted product or service through Groupon. This is probably one of the reasons why Google desires to acquire Groupon.
One of Groupon’s biggest competitors, LivingSocial, has already been scooped up from Amazon for a cool $175 million. Although it’s a lower offer than the Google’s projected offer, LivingSocial company is smaller than Groupon. Amazon believes that they can raise the value of LivingSocial to $1 billion dollars according to an article off the Fast Company website by David Zax. Another reason why Google is looking to purchase Groupon is for the chance to increase its valuation, as the previous example indicates. Google is one of the largest search engines worldwide. If Groupon decides to let Google buy, do you think that Google can increase the value significantly? Or do you think it would be a bad investment on Google’s part?
Think about it,
Jefo
Sources: http://www.fastcompany.com/1707138/groupon-competitor-livingsocial-gets-175-million-from-amazon, http://dealbook.nytimes.com/2010/11/30/google-is-said-to-be-close-to-buying-groupon/,%20http://searchengineland.com/google-to-buy-groupon-for-5-to-6-billion-57250 and http://www.groupon.com/miami/
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