Google said to be buying Groupon for $2.5B

Updated: Latest unconfirmed report intensifies chatter about implications

Near as I can tell, today's flurry of "Google buying Groupon" headlines is traceable to this report on VatorNews, which attributes to "an unnamed insider" the purported fact that the deal is done and the price tag is $2.5 billion.

VatorNews bills itself as "The trusted source for emerging tech." We'll see if its source proves trustworthy this time, as for now neither Google nor Groupon is confirming the source's assertion. From that report:

Google has just purchased Groupon for $2.5 billion, according to an unnamed insider who spoke with VatorNews.  Neither Google nor Groupon could be reached for comment to confirm the report, but Vator's source is reliable and the report falls in line with the recent string of Groupon acquisition rumors.

Talk about a possible acquisition by Google has been bubbling since November 19, when rumors first emerged that Google had made an offer of some $2 billion to $3 billion.  The rumors were first reported by Kara Swisher of All Things D, who claimed that Google and Groupon were already in acquisitions discussions.

For her part today, Swisher is saying that any Google purchase of Groupon is likely to cost more than that reported $2.5 billion. She writes:

It's not just that the deal will likely come in at a higher number-upwards of $3 billion, according to sources I have spoken to-which will mean a big payoff for Silicon Valley's Accel Partners, Boston's Battery Ventures and Russia's DST Global.

Or that this deal will net New York bankers used on each side-Allen & Co. for Groupon and Morgan Stanley for Google-sizable fees.

It's because as soon as it purchases the social group buying phenom, the search giant will be buying a whole lot of pricey regulatory scrutiny too.

Google can't serve its employees lunch these days without regulatory scrutiny.

The Groupon concept is pretty straightforward (so much so that it has spawned numerous imitators): Participants are presented with a deeply discounted daily deal and have only a certain number of hours to act before the offer expires; if enough act, everyone gets the discount; if not, deal's off.

I created my own Groupon account shortly after writing this Sept. 7 post about the company's phenomenal early success. Since then I have watched my inbox daily for Groupon offers. I have read and considered them all. And I have yet to take advantage of a single one.

I'm not saying this means anything, of course, as I am not a typical Groupon client in that my wants are few and my discretionary dollars even fewer.

Nevertheless, that has been my experience and you may make as much or as little of it as you will.

Google appears unmoved.

(Update: Some interesting discussion/skepticism at Ycombinator's Hacker News, including: "It's a wonderful business model. Sell other people's services and goods for half off and keep half of the sales. Yea, I'm a little jealous. I'm a little skeptical on the longevity of the profits but it's smart to sell while the momentum is red hot, if this actually did happen.")

(Update, 4:15: Still nothing official as we near the end of the  business day here on the East Coast ... and that has skeptics raising questions.)

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