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Confirming lots of speculation, a source close to Groupon board members tells us that anti-trust concerns ultimately forced Groupon to turn down Google's $6 billion offer. This source says the view on Groupon's board was that a Google-Groupon merger would draw more regulatory scrutiny than any other deal Google has ever done.
Because of this view – that Google-Groupon might not be allowed to go through and that it would take months and months to find out the bad news – board members decided they would need a significant break-up fee if they were to accept Google's offer.
We don't know the number, but our source says the board wanted a break-up fee akin to the one Google gave DoubleClick. A source close to DoubleClick's executive team at the time of that merger tells us the company "got significant protection." In agreeing to acquire AdMob for $750 million, Google also agreed to a $700 million kill fee.
A $100 service becomes $25 for the merchant as it needs to be at about 50% discount and Groupon gets a cut. That's not sustainable for obvious reasons.
It is also a great way to ruin your prices. Nobody will want to pay the normal fee any longer.
It is a simple model that scales well and could go global
Maybe not the narrow use-case that you outlined but in the real world this is a great service.
Google-Groupon merger would draw more regulatory scrutiny than any other deal Google has ever done.
Wait 6 months and $6 billion will be cheap. Groupon is here to stay with an entirely new local based advertising model. The same model, that Google has not been able to master. Groupon has 3k employees working on 1 thing - deals deals deals. They are doing with phone calls, what Google AdWords has not been able to do with algos. Groupon has mastered local based advertising. Sky's the limit. How long before Google attempts to close Groupon?
Google-Groupon merger would draw more regulatory scrutiny than any other deal Google has ever done
[edited by: Hugene at 3:14 pm (utc) on Dec 17, 2010]
Is this an assumption or do you have some data that would show this to be true?
The pier sold 7,500 Groupons for the beginning days of its annual Winter WonderFest, an 283 percent increase from its first venture into discounted sales via Groupon last year.
This raised overall ticket sales by 12 percent. But use of the deal site, plus parking discounts at the pier, brought event revenue to date down 8 percent, to $420,000, pier officials reported Wednesday morning.