Groupon turns down a $5.3 billion offer from Google. What's the thinking behind the rejection? I understand that they're top dog with an international presence, with projected revenue of $500 million in 2010 (http://en.wikipedia.org/wiki/Groupon), but this seems crazy.

These coupon/daily deal businesses are popping up like zits on a teenager. I doubt there's much if any loyalty to Groupon, everyone I know just scans through the multitude of offers they get each day from various sites and buys what they want.

It's a brilliant concept, and I know $5.3 billion doesn't buy what it used to, but it just seems like quite a gamble to assume (if this is what they're assuming) that their growth will continue unabated and they're going to be worth many times the $5.3 billion if/when they roll out their IPO.

This grossly violates my Number 1 Rule of Business: "You're handing me over a billion dollars? Yes, I'll take that right away."

Well yeah, there's that. I was just wondering what I'm missing here. Maybe it's the utter confidence that Groupon seems to possess that despite the competition they're going to be just fine.

I know nothing of Groupons funda. but thats a a lot of money for a coupon company.

didn't such money existed even in the coupon industry.

I was floored by both the offer and the rejection. Then again today's SF coupon is half off a night at some place called Costanoa in Pescadero and 935 people have bought it already- that seems like one helluva response.

cool idea, looks to be the fastest online company to make a billion

Mason only has 10% apparently, so he's more in line for $600M, but I take your point.

Wow-- according to this article in Inc. they take about a 50% cut of the sales. What a business model.

http://www.inc.com/magazine/20100401...ost-sales.html

Yes, they take a huge cut. At least some of the businesses regret their deal offer on Groupon.

I think not taking this money is a mistake.

It's going to be interesting to see how their expansion plays out. They're already in about 150 U.S. cities and obviously have all the major ones covered-- how much upside could they possibly have? A similar site, HomeRun, is coming on with social media tie-ins, others like LivingSocial are up and running... at some point somebody's going to undercut Groupon's fees and start chopping up the pie, no?

I'm involved in something that takes that concept much, much further
and some of the companies we're working with see that kind of value
to come.

I think there are easily billions out there in this field.

same basic deal of the day biz model, toronto?

i wouldn't have paid $6B if i were google, bc i don't think their biz model is sustainable, but they might be able to use their current success to expand into other things.

What I am involved in is not a deal of the day type thing but more
of a system of directly targeting marketing offers (among other features)
to specific consumers based on their known preferences and experiences.

It is much more robust but essentially allows say Coke to target
Pepsi customers with offers while not wasting efforts or hurting margins
by targeting Coke customers. Other features also add value to clients.

I can't say too much because part of the code is still being written but
initial response from potential clients has been positive enough that I left my
job to work on this full-time.

lol

I haven't looked into the company itself specifically but my girlfriend is addicted to the spa coupons and probably has visited half of the spas in NJ and NYC.