Groupon, a Chicago-based Internet-coupon service with more than 35 million users, walked away from an acquisition offer from Google yesterday, according to a person with knowledge of the matter.
The proposed acquisition fell through amid hesitation by Groupon’s founding team, said the person, who requested anonymity because the talks are private. The startup will decide next year whether to sell shares in an initial public offering instead,the person said. The discussions could resume if both sidesovercome their differences.
Google had offered $6 billion, including incentives that would be paid to the target’s managers if performance targets were met, people familiar with the matter had said this week. Groupon would have helped its new owner expand in the $133 billion US local-ad market and lessen its reliance on Internet-search advertising.
“Clearly Google wants to get into the local space and Groupon was one way,” said Aaron Kessler, an analyst at ThinkEquity LLC in San Francisco, who has a “buy” rating on Google and doesn’t own it.
Google’s biggest deal
Google CEO Eric Schmidt had been willing to pay almost twice the $3.2 billion he spent on DoubleClick, his next- most expensive target, to add features and repel a threat from such rivals as Facebook.
Jill Hazelbaker, a spokeswoman for Google, said the company doesn’t comment on rumors or speculation. Julie Mossler, a Groupon spokeswoman, also declined to comment. Google, which boasts $33.4 billion in cash and marketable securities, had initially offered between $3.5 billion and $4 billion to buy Groupon, a person familiar with the matter has said.
