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Groupon revenue was overestimated, more like $800 million; UPDATE: $2 billion is right

Groupon Logo (Dec 2010)It’s safe to say that, internally, emotions have been running high regarding Groupon’s rejection of Google’s $6 billion offer. While both companies have declined to comment on the failed acquisition, an inside source is speaking up about Groupon’s reported revenue.

In the hype of the company’s decision to remain independently owned, the degree of its success was slightly exaggerated. Some media outlets were reporting numbers as high as $2 billion in annual revenue. Turns out it grosses more like $800 million a year. A “trusted source with firsthand knowledge of Groupon’s financials” (which to us sounds like a disgruntled Groupon accounant) reported to Mashable that the inaccurate numbers have been thrown around and that the startup’s “run rate” annually is $800 million.

A word on run rate: It’s the projection of a company’s financial performance if all things remain as is, meaning if things keep up for Groupon, it will have itself an $800 million yearly income. Obviously, this number can widely vary, and in truth easily could increase if Groupon Stores take off.

And by rejecting Google’s offer, it seems like the startup intends to grow, and a $2 billion annual revenue might not be that far off in the future.

A BusinessInsider article pointed out that Mashable’s source may have been using some conservative judgment with that $800 million run rate. “According to a source familiar with the company’s financials,” Groupon’s run rate should be calculated with its fourth quarter in mind, and on doing so gets you a number far exceeding $800 million. The source points out that Groupon is growing at incredible speeds and that in 2011 it’s projected to easily exceed $2 billion.

Molly McHugh
Former Digital Trends Contributor
Before coming to Digital Trends, Molly worked as a freelance writer, occasional photographer, and general technical lackey…
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