Groupon explains why Google is in takeover talks
US voucher website Groupon, which trades in the UK as MyCityDeal, sets out why companies like Google and Yahoo! are interested in the fast growing company — Groupon has revealed why companies like Yahoo and Google may want to buy the fast growing online discount voucher company.
Context & Ripple Effects
This follows BoomTown's report last week that Google had turned its local ambitions toward Groupon and was weighing who else might enter bidding — the Telegraph piece now gives Groupon's own account of why suitors like Google and Yahoo are interested in the fast-growing voucher business.
The takeover talk is reported but unconfirmed by both parties, and Groupon's confirmed UK footprint through its MyCityDeal brand underlines why the company matters to US portals hunting local advertising reach beyond their home market.
First-order effects
- Google and Yahoo, if both are genuinely in talks, face a contested process for the same asset, giving Groupon leverage on price and terms right now.
- Groupon's decision to explain publicly why buyers want it functions as a negotiating signal — it raises the company's profile at exactly the moment bidders are sizing it up.
Second-order effects
- Multiple rumored bidders would push any eventual valuation up, since Yahoo's interest removes Google's option of a lowball approach.
- Other daily-deal operators become either acquisition targets or defensive buys for portals that lose this race, tightening the market for local-commerce assets.
Third-order effects
- The episode points toward large web companies buying established local salesforces rather than building them, because Groupon's core asset is its merchant network across cities and countries.
- If portal-scale acquisitions of deal sites continue, group buying consolidates from a field of clones into a handful of platforms attached to major internet companies.
The trend: Daily-deal and local-commerce businesses are becoming prime acquisition targets for large web companies seeking instant merchant relationships instead of years of ground-level sales hiring.