Google Executive: No Time to Build, So We Buy
As news of Google's attempted acquisition of the daily deals site Groupon ricocheted around the Web, one big question loomed large: Wouldn't it be easier for Google to build out a similar service than pay several billion dollars for Groupon?
Context & Ripple Effects
Google's interest in Groupon has been building all month: AllThingsD's BoomTown first reported Google turning its local eyes toward Groupon in mid-November, and by month-end reports put a possible deal price around $2.5 billion. The question hanging over those reports was obvious — why pay billions for what looks, on paper, like a buildable product?
First-order effects
- If the rumored multibillion-dollar bid proceeds, Groupon's real asset in Google's eyes is its local merchant salesforce and relationships — the parts that take years to replicate, not the deal-a-day mechanics.
Second-order effects
- An offer at that scale would force the other potential bidders floated in November's reporting to either match Google's price for Groupon or pivot to smaller daily-deal targets.
Third-order effects
- The buy-versus-build answer signals that for incumbent platforms entering fast-growing consumer-local markets, speed-to-market via acquisition is becoming the default playbook, putting a premium price on any startup with an entrenched local sales operation.
The trend: Large internet platforms are shifting from building new capabilities internally to buying established players outright when a category heats up faster than internal development can respond.