Google Groupon Deal Emerging

By Richard Gibson
Nov 30 2010

Google, the Silicon Valley search engine giant, is rumored to be discussing a new deal with daily deals site Groupon today.

Groupon has been a target of many companies for the past year. It was rumored yesterday that Google had purchased the company for $2.5 billion. However, those rumors proved false as Groupon had recently turned down an offer of $3 billion from Yahoo.

An inside source has said that Google is prepared to offer Groupon a total of $6 billion for their company. According to the reports, Google will make a single cash payment of $5.3 billion and then keep an additional $700 million in reserve. The reserve cash will be used to retain current employees and maintain a smooth transition from one company to the next.

Google is interested in Groupon for many reasons. The most logical being that Google has been unable to build the same kind of service that Groupon offers. Furthermore, Groupon has revenue of $50 million a month, which could more than double under control of Google.

Google has spent the better part of 2010 looking for new revenue streams. They have made several purchases over the last six months. Today their stock prices dipped sharply on the announcement that they would make the offer to Groupon.

Google is expected to officially announce the deal with Groupon later this week. Groupon has been making statements via Twitter that they have a deal in the works and have been telling customers that nothing will change.