Groupon is a very primitive player in the space we hope to get to and yet they still have something that FB doesn't have and can't get in a very short time on its own ( I am making an assumption on how they work internally here).

If Groupon or FB see the endgame in the same way we do then they were right to turn the offer down. I have no knowledge though of either's vision for the future so can't be certain they see the same light coming.

Keep in mind that when Google bought YouTube it was making little or no money... Groupon is raking it in, so the groupon deal is based on revenues + whatever value they see above and beyond the revenue.

I think raking it in is a little overstating it. The company is making money and I think revenue was about $500M but they have serious issues on multiple fronts. I rarely make predictions public but I say stand by my claim that they will be nothing in two years.

I am very inclined to agree with Henry's analysis but at the same time I can't stop thinking about how Google has access to a large chunk of Groupon's numbers through the Android store.

They know how many times the app is downloaded and probably has usage data too on the app itself.

I guess it is difficult to place a figure on this company because there is little to compare it to. I think amazon would be way more likely to buy it than facebook. Amazon purchased the POS known as Woot! a while back. FB seems like a company that would rather compete b/c they have a platform that can probably accommodate it.

IDK how successful FB would be on non mobile devices. If having "info" like FB has would be as easy to exploit as everyone makes it sound, google would be worth way more.

Naturally my initial reaction was lol @ turning down 5 billion. But they could be worth way more if FB and company cannot execute a good competition.

Given public information I'm inclined to agree with Henry. It's not impossible that this is just a really stupid deal that google just luckboxed away from. It's also possible that Google offered a maximum of 5.3b and the terms of the deal left much of the risk of Henry's scenario with groupon.

Google may also know quite a bit more than public info... It's hard to see Google doing a truly bad -EV deal for that kind of money.

Lol at zuck not being able to do something this simple. FB is a monster as potential competitors go.

Saw a long interview with the Groupon founder yesterday. He is not at all concerned about money and never has been, he says he just wants to work on interesting projects.

Remaining independent allows him to work on whatever he wants - if he sells to Google he will be their employee. I think that had everything to do with them turning this down and I think they will keep turning down offers.

Other startups are pressured to sell by their investors because they don't make any money, Groupon is going to be spitting off lots of cash it it keeps growing as it is, so that should pacify the investors in a way basically no other startup can - except maybe Facebook now. I believe they are (finally) profitable.

As an aside, I was offered Facebook shares today. $100k minimum investment, valuation of $45-50 Billion. I declined. That valuation is just ******ed, and I'm a huge Facebook bull and fanboi

Yeah, that's higher than any estimation I have seen. I think there is a secondary market somewhere where these things are traded.

SecondMarket.com - but you have to be buying millions to buy Facebook shares there. The only way I've found to get in for less is through money managers who put together a bunch of smaller investors and buy as a group.

I believe the offer from Google was $4.6 billion in cash plus a $700 million earnout (or a cash/earnout split every similar). I nearly spit up my coffee when i read it on mashable. I figured the earnout would be at least 50% of the total sale, especially with all of the other best deal sites getting backed by VC money these days. IMO it's a snap call and not even close.

pretty sure i've read multiple places that it was 5.3billion plus .7 in incentives.

agree that it should've been snapcalled, even if Mason insisted on some sort of system whereby he was able to exert control for a few years.

I read today that Groupon wanted some sort of insurance in case Google was ruled unable to acquire them for antitrust reasons, and Google didn't want to provide this insurance, and that was largely what made the deal not go through.

That makes sense. Google is getting a lot of anit-trust heat right now. Groupon probably asked for a kill fee similar to what they agreed to with Admob ($700 million IIRC) and Google said no.

someone reliable told me groupon has over 750,000 accounts in the metro chicago area. considering there are like ~10m people in the area, that's pretty insane. nearly 10% of the city has a groupon account. also, most of the deals are in chicago (not the metro area) so i'm guessing the majority of the users live in or very near the city. it's probably more like 20%+ of the people living in Chicago proper have a groupon account.

holy crap. logged into sharespost for the first time in awhile and facebook shares have taken off! just this past summer they were like 25-35b in most cases. cheapest valuation i can find is 52b and one implied valuation is at 86b

what do you guys think about twitter? 4-5b valuation. i think there are like 200,000,000 accounts, no idea how many are actually in use.

if facebook has monetization woes (i personally don't think it really does), i don't see twitter ever making any real money unless it changes its format drastically. 5b sounds super optimistic.

are there any good usage statistics on twitter? aside from @brokelivingjrb i find it super boring and never really login, though maybe i'm following the wrong people. i suspect that unlike facebook, a large portion of their subscribers aren't active.

I think twitter had revenues of $50 million this year, that's revenues not profit. A $5b valuation is insane.

25c/account. lol. but i'm not even surprised.

what i like most about twitter is that it is big in some emerging economies, especially Latin America -- huge in brazil -- and a couple Asian countries as well. and in the us, it is biggest among latinos.

i'm inclined to think it's a buy, but i haven't thought about it too much.

I think Henry is right that they are going to end up regretting not taking the offer. I don't so much agree with his downplaying of the business model as much as I just think it's not a market that requires/facilitates one 'leader'. Facebook, eBay, Twitter, etc. all have more intrinsic value because you can't just make another one. I agree with the person above that said if Facebook/Google launched an effective copycat campaign they would easily be able to steal a ton of the market share from Groupon. That said, with the infrastructure Groupon has, I do think the deal for $5b would have been a good one for Google in that Google would have been able to mobilize Groupon in a very unprecedented way.

a fun read: Cuban's blog post on google

Groupon at 6B is a better buy than twitter at 4B imo. Groupon is huge and growing like crazy. They bought all the big copycats in Europe and Asia already. They are opening Groupon Stores soon, which are deals for businesses who don't want to give G 50% but want to have a groupon offer. No daily email blast but users can search and follow for the deals (like FB News Feed but a Deal Feed) at the G website. G takes 10 - 30% instead of 50%. If I was Andrew i would have taken the deal of course, but i think Groupon can grow to 10-15B in the next 2-3 years. They have a huge sales team of like 2000 or so. Great concept and a great name. When people think of daily deals, they think of groupon, not living social or anything else.

never even heard of it

I had never heard of it either and only know of it's existence now because of the non GOOG deal.

I just went onto their web site and I am still shaking my head TBH.

First time I got a no load

Reload and spent about ten minutes on the (ver slow) web site.

Soooooo......let me see if I have this right. I tell it where I am a deal on a totally random product or service that I may or may not even remotely have a use for is offered to me and if enough other people have already seen and bought said random offer I can join them OR if enough people have not I can put my name onto a list of people who have the 'potential' to get this great deal?

I checked a few places just for testing

LV - a plane ride
North Jersey - Refelxology whatever tf that is
Cenrtal Jersey - Massage
Long Island - Skiing equipment or something

$5,000,000,000 ?????

In the immortal words of Mr. Tom Hanks in the movie Big...."I don't get it?".

millions of people receive the emails per day. just because you don't like today's deals doesn't mean others don't too. it doesn't take a big percentage of the millions on the list to make serious money. if 25,000 people a day buy something (just guessing), well, that's worth a lot of money when they take 50% of whatever is spent.

i should see a couple people from groupon tonight, i'll try to get some more info.