Deals wrap: Is Google getting a deal for Groupon?

November 30, 2010

Google Inc is inching toward buying e-commerce coupon website Groupon Inc for as much as $6 billion, the New York Times said on Tuesday. A deal, which could be in the range of $5 billion to $6 billion, could be struck as soon as this week but people with direct knowledge of the matter cautioned that the talks between Google and Groupon might still fall apart, the paper said. See Reuters analysis on how Google plans to spend its $33-billion cash hoard.

If completed, the acquisition would be Google’s most expensive to date. But is the price tag too steep? Groupon has so far raised $170 million in venture capital and reportedly hauls in upwards of $50 million every month.

All Things Digital tech columnist Kara Swisher, who first reported Google was interested in buying Groupon, calls the potential blockbuster a “killer move” for Google and writes: “While the $6 billion Google is considering paying seems high, Groupon’s fast-growing revenue and profitability make its multiples less daunting, said those familiar with the matter.”

On the nay side of the ledger, TechCrunch editor Erick Schonfeld says Groupon is a bad fit for the search giant. “Buying Groupon would be a very risky $5 billion bet for Google in an unproven area outside its sweet spot of search.”

In another potentially huge buyout, Swiss engineering group ABB is to buy U.S. industrial motors firm Baldor Electric Co for $3.1 billion to capitalize on a global push for energy efficiency and boost its North American presence.

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