Groupon being the largest group buying service, has become the clear target for the internet head honcho: Google. To date, this would be the biggest acquisition for Google not just from a business perspective, but also by flashing a hefty price tag. Rumored to be a deal within the $5.3 and $6 billion range, this appears to be worth every penny for Google, but still leaves speculation of what it means for Groupon.
Although seemingly very apprehensive, Groupon could benefit immensely from this. Both Groupon and its biggest competitor, LivingSocial, rack up a very large bill for advertising purposes. If Google were to acquire Groupon, they would have search inventory set aside, cutting down on their advertising spend – ultimately lowering their operating costs and making for a more profitable business.
In addition, Groupon will receive more prominent placement throughout Google’s local search product page. Most likely they will be located underneath the Google Places banner allowing their presence to continue to be recognized and acknowledged.
Having Google attain Groupon may also assist in growth of their relationships with businesses. There have been complaints from small businesses and the lack of attention they received from Groupon and its’ deals. Because the larger and more well-known companies took advantage of what Groupon could offer, smaller businesses were left in the dark. With Google having the authority of Groupon, they could potentially redirect the concerns to potential opportunities and thus, leave the past in the past.
However, as with anything these days, there can’t be pros without the cons. And yes, Groupon does take a risk if they agree to this deal. Concerns that Groupon may not integrate properly into Google have risen, and this could be a risk not worth taking. There have been other businesses acquired by Google that found this as an issue and needless to say, are no longer around. So, the risk taken by Groupon could lead to its’ early death if the integration process is not successful.
Along with this, an early death for Groupon could be a clear path to success for LivingSocial. Hot on the tails of Groupon, their number one competitor would be more than willing to take the limelight and move forward.
Ultimately, if this acquisition deal goes sour it leaves big shoes to fill – but there are plenty of other group buying services more than willing to step right in.
