That's a landmark deal for Google , one of the biggest. Why's it so important :
Google has tried to capture a bigger share of local advertising dollars, but its primary product—paid links next to search results—is ineffective for the vast majority of small businesses, says Mr. Borrell. Few sell products or services online, so paid search doesn't pay. Groupon has proved more effective, sending customers through the front door. Buying Groupon could thus give Google a more successful way to engage with local merchants.
Google would also get email addresses and other personal information from Groupon users, which would enable it to provide more targeted, more lucrative advertising to them. Not to mention that Google might market Groupon deals to folks carrying cellphones powered by its Android operating system.
Part of the rationale of the deal has to be using Google's immense scale to expand Groupon's business, but that is easier said than done.
Google local / places marches on . Sayonara Yelp , local business listings and a lot of others ... Google can do it directly and create great earnings to pay for the acquisition i figure. It's not a lot of money considering the cash flows and profits it will generate in the deal.