Google looking forward buying e-commerce coupon website Groupon Inc for as much as $6 billion, the New York Times said on Tuesday. The possible deal was reported by the technology blog All Things D and by The New York Times, citing unnamed sources with knowledge of the matter.
The deal is worth $5.3 billion with an additional $700 million earnout based on performance, according to All Things D. The New York Times reports that a deal could be completed as soon as this week. With a price tag almost double that of DoubleClick, Google’s biggest acquisition to date, there are still plenty of ways for this deal to fall apart. That said, it is a killer move for Google–despite the high price–given it has long tried to enter the local advertising space, with decidedly mixed results. With its more than $33 billion in cash and strong stock, it had previously tried to buy local reviews site Yelp, in a deal that fell apart for reasons that are still unclear.
Google or Groupon has yet to confirm the deal but these rumors seem to be pretty legit. TechCrunch documented tweets between Andrew Mason, CEO and founder of Groupon and Google’s M&A lead Neeraj Arora in September possibly talking about deals between the two companies.
Groupon has been quite the hot topic these days. Earlier this month, Groupon was rumored to be considering raising funds that would value the company at $3 billion. That rumor was followed by reports that Yahoo was looking to woo Groupon for as much as $4 billion—the second reported attempt by Yahoo to buy the social shopping company.
Groupon pioneered the group-buying model through its deal-of-the-day business model. Launched in November 2008, the company has grown from an offshoot of ThePoint to a multi-billion dollar empire with thousands of employees worldwide. In April 2010, Groupon raised $135 million from Digital Sky Technologies, setting its value at over $1 billion.
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