The Wall Street Journal reported that “reliable sources” are stating Groupon is close to paying as much as $6 billion for Groupon. The reliable sources are probably bankers representing Groupon. However, as noted yesterday, even a price of $3 billion makes no sense to us. Google controls the flow of the vast majority of website visitors, has tremendous management talent and over $33 billion in cash. Why would they use $6 billion in cash (or even stock) to acquire a business which has no sustainable advantage should Google decide to pursue its own proprietary solution? Time will tell, but with so much chatter there is probably some validity to the rumors. It would be a mistake to see Google buy Groupon at the kind of prices people are talking about.
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