New rumors peg Google’s price for Groupon at more than $5 billion

Google-GrouponYesterday we heard that Google was rumored to be buying Groupon for around $2.5 billion – a seemingly low number, seeing as it was speculated Google would easily outbid Yahoo’s similar offer. Turns out that notion was spot on. Tuesday, the word is that Google is willing to acquire Groupon for somewhere between $5.3 and $6 billion.

All Things D and The New York Times are reporting that both parties could be signing on the dotted line as early as this week, finalizing the largest acquisition in Google’s history. Google declined to comment, although Groupon CEO Andrew Mason told The New York Times he would speak “only if you want to talk about my other passion, building miniature dollhouses.”

While paying triple the amount Yahoo offered seems like a steep price for a startup, Google has the cash – $33.4 billion in cash holdings to be exact. And this deal is generally being heralded as a huge coup for the Internet giant: It gives Google its long-awaited foray into an established local market, and let’s not forget the approximately $350 million Groupon rakes in annually. Not to mention the subsequent barrage of local advertising revenue Google’s been trying so hard to get its hands on.

At the same time, sources are still minimally cautious about the deal. Groupon could pull out at the last minute, as the site did with Yahoo. And it’s possible that the price tag has been climbing due to Groupon resistance. It’s unlikely that Google will offer a higher bid, however, so the Google-Groupon saga could be wrapped up in the very near future.

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