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Did Google buy Groupon for $2.5 billion over the weekend?

Molly McHugh
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google-groupon-twitterBack in September, Groupon CEO Andrew Mason and Google M&A lead Neeraj Arora had an intriguing back and forth on Twitter. The thread included a cryptic note about “hard” work from Mason, and a vague congratulations from Arora. This hardly seemed indicative of anything, until now, as rumors are wildly pointing to a Google-Groupon acquisition that has been in talks for some time.

VatorNews is reporting, based on an anonymous insider source, that the Mountain View company bought the daily deals site for $2.5 billion, which is significantly less than initial speculation concerning the buy out.

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If the yet-unconfirmed deal turns out to be true, Google will have succeeded where Yahoo failed. Yahoo attempted to acquire Groupon earlier this year but was unable to come to an agreement with the popular startup. In addition to turning down Yahoo, Groupon has also been attached to the idea of remaining independent.

So why the change of heart? Possibly the skyrocketing number of Groupon imitators and strong competitors, most notably in Facebook’s recently launched Deals feature has something to do with it. It’s also been reported that similar site LivingSocial is actually growing faster than Groupon, and that it has the capacity to continue. The deal with Google seems like a win-win for both companies, allowing Google to finally bolster its sagging social attempts as well as its Places application, and giving Groupon some protection from its ever-increasing list of rival sites.

Google is clearly attempting to stake out some territory in the burgeoning local market. The company recently launched HotPot, a social, review-focused extension of Google Places (yes, quite like Yelp, which Google failed to acquire) and has also revamped Google Products to include more local businesses that carry searched-for items. And while both seem perfectly capable of performing these services, they don’t carry the notoriety that Groupon does. Ushering in the well-established site would give Google a leg up in this market.

And even though this notoriety comes with a hefty price tag, The San Francisco Chronicle points to a research report claiming the company has some bragging rights when it comes to acquisitions, referencing similar deals with YouTube and DoubleClick. “Google is using its cash to buy into an emerging area of the Internet, thus maintaining its relevance in new segments. Since YouTube and DoubleClick are both gaining and posting sizable revenue numbers, we think Google’s acquisition history has been solid.”

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Topics
AOL’s Patch, AmEx take aim at Groupon with Patch Deals
Patch-AmEx-Serve-Patch-Deals-v2

As if there weren't enough daily deals services out there already, American Express and AOL's Patch subsidiary network announced a "strategic partnership" today to launch a new Groupon-like service. Dubbed Patch Deals, the service will utilize AmEx's digital payment technology, Serve.
Patch is the "hyperlocal" segment of the newly-formed AOL Huffington Post Media Group, with more than 800 neighborhood blogs and 850,000 businesses featured on the network. Through this online community, Patch Deals will offer customers the ability to save cash at local merchants. And, in turn, local merchants will be able to advertise their deals in a "streamlined, effective way," the press release reads.
Basically, it's exactly the same service that Groupon and LivingSocial offer, but with the AmEx tie-in to give it that little bit of added validity and accessibility.
To utilize the service, Patch users "may be offered Serve accounts" which would include a co-branded card that users can simply swipe to receive their discounted goods and/or services. This means "no coupons to print or codes to remember," says Patch PR.
While the daily deals market is certainly hot right now — Groupon could potentially bring in $3 billion in revenue this year — Patch Deals seems more like a creative way to push American Express' Serve payment service — a kind of pre-paid credit card meets PayPal, which launched in March — and boost traffic to AOL's Patch network.
At least, that's what it looks like at first glance. According to BNet's Erik Sherman, Patch Deals could be "more economically attractive for merchants because there’s no need for them to share revenue, and more convenient for customers, with a no-coupon form of in-person redemption, as well as online purchasing." All of this adds up to profit for Patch/AmEx and loss of revenue for Groupon, LivingSocial, and the slew of (other) clones out there.
Patch Deals is currently only available in six communities, so we'll have to wait to see whether the service can make it on the small scale before we can judge it on Groupon's level.

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Yahoo Mail update May 2011

Internet giant Yahoo is rolling out a new version of Yahoo Mail to its 284 million users in the next few weeks, hoping to make Yahoo Mail the central hub of their online and social lives by integrating a raft of new social features, improved security, and mobile access, along with cloud-based technology that Yahoo says makes the service up to two times faster. The changes include a major facelift for the familiar service, and the company hopes the new social and sharing capabilities will help Yahoo Mail keep its edge over Gmail in terms of overall number of users.

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It’s not a guarded secret that Google has been planning to turn YouTube into a viable online video streaming platform, evolving it past its original status as a digital haven for home movies. Today YouTube announced it is partnering with Sony, NBC Universal, and Warner Bros. to host “thousands of full-length feature films.” Users can now rent movies from the 3,000 available titles with nothing more than a YouTube account and $3 to $4. Customers will get 30 days to watch the movies and 24 hours after beginning them.

YouTube says it’s in the process of rolling out additional titles over the next few weeks at youtube.com/movies, and there will be a plethora of extras, like “free behind-the-scenes videos, cast interviews, parodies, clips, and remixes” to boot. Movies can be rented from any computer or Google TV, and will include Rotten Tomatoes reviews for your pre-selection purposes.

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