Rejected by Groupon, Google Goes Shopping for Daily Deal Sites

By Nicholas Jackson

Google, looking to get into the daily deal website business, recently offered a reported $6 billion for Groupon. But the site, anticipating continued growth and expansion, turned down the offer. Now, sources for the Post say that the search giant is on the hunt and in talks with two smaller Groupon competitors about acquisition. Josh Kosman suggests that Google learned from mistakes made years ago, when it had a chance to buy Facebook, but tried to build its own social network instead.

LivingSocial, with a $1 billion valuation, is the second-largest coupon site. New York's BuyWithMe, the third- or fourth-biggest player in the space, may also be on Google's short list, though it has only $20 million in revenue.

BuyWithMe interim President David Wolfe, who declined to comment on whether he was speaking to Google. However, he did say that he believes Google needs to enter the coupon advertising market. It is the only effective model so far in attracting smaller retailers, Wolfe said.

BuyWithMe has New York area subscribers waiting to sign up for specials on restaurants, saunas and plays. If a certain pre-set number are interested, the merchant offers the coupon. Subscribers send payments for the discounted goods or services offered directly to BuyWithMe, which then sends them a voucher. BuyWithMe and the merchant then split the revenue.

Read the full story at the New York Post.

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http://www.theatlantic.com/technology/archive/2010/12/rejected-by-groupon-google-goes-shopping-for-daily-deal-sites/68331/