Google To Buy Groupon

News has been filtering through all week that Google is to acquire the online discounter, Groupon for $5.3bn. That’s BILLION!

This would make the dela the second biggest in corporate history. So the quote of Michael Gambon from the Layer Cake, “the art of good business is to be a good middle man”, may be born out in spectacular fashion.

Groupon’s model is based on offering discounts off a retailers products or service, typically over 50%, if enough people sign up for the offer, the discount is triggered and Groupon takes half of the value of the discount – in this example 25%.

What started as a way of independent retailers offering discounts to their local marketplace, took off in huge style earlier this year when Gap offered a 25% off discount through Groupon.

No doubt Google see the addition of Groupon to its armoury as a way to combat the development of Facebook Deals who are growing closer and closer to Microsoft and to position themselves on the front of the grid in the world of social commerce.

But is Groupon the right choice? What is Groupon? It’s not a technology company, it’s a discounter that uses email (and not selectively at that!) to promote its wares. As email comes under threat from tools such as Facebook messaging, is this the wisest path to follow?

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