Groupon turns down $6 billion big ones

Earlier this week, Google was in talks with Chicago based collective buying power service Groupon for its largest acquisition estimated at $5.3 billion, with a further $700 million offer based on certain incentives. This shocking turn down can only mean that Groupon CEO Mason believes his company is going to be worth much, much more. Now one of the questions is going to be which “G” is most beneficial for local businesses advertising. A recent study by Rice University surveyed 150 small to midsize businesses that had used Groupon. 66% said their Groupon deal was profitable, 32% found it unprofitable, and 40% said they would not use Groupon again. Though Groupon’s discounted prices may mean losing money for some businesses, is Google’s platform of mass advertising  any more effective? With thousands and thousands of businesses being featured through Google, local businesses can get lost in the chaos. Google could mimic Groupon by including daily local deals, but they probably wouldn’t be as successful as Groupon as it has already established itself as the “1st” in the segment. Will Google go after another Groupon-type company? I don’t see why not, when tapping into the local advertising market would only strengthen their power as a search giant. And Google sure wouldn’t like to see Groupon in the hands of Yahoo or even worse Facebook. This shows that local advertising is seeing massive growth on the Web. It also gives people even more incentive to start up small online companies for very little money, knowing that the big kid on the block is willing to pay major, major bucks for a “new toy”.