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Posted at 2:15 PM ET, 11/29/2010

Google buying Groupon? Says who? (updated)

By Rob Pegoraro

If you want to see how rumors can spread in the tech press, click over to Google News and search for "google groupon." You'll see a few dozen stories all suggesting that the search giant just paid $2.5 billion to for Groupon, the social-shopping site that bundles new bulk discounts every day.

But none of the stories has been confirmed by any sources except for noting that VatorNews (a site that I must confess I did not know existed until this morning) posted an item that "Google has just purchased Groupon for $2.5 billion, according to an unnamed insider who spoke with VatorNews."

And Vator's own headline ends in a question mark: "Google buys Groupon for $2.5 billion?"

Google spokesman Adam Kovacevich gave the reply you'd expect from most companies in this situation: "No comment from us on this one."

That's an unhelpful but telling response: If you start saying "no comment" to some acquisition rumors and "that's not true," to others, people might read the former response as, "Yes, but we're not ready to announce anything."

I see plenty of reasons to wonder why giving Google access to the attention of Chicago-based Groupon's subscribers, 18 million as of September, and the businesses that use Groupon offers to lure new customers would offer a sufficient reward overall. For an overview of them, see Kara Swisher's post on AllThingsD, noting the high price and higher regulatory obstacles such a combination would entail.

We should keep in mind Google's prime directive: getting people to spend more time on the Internet, where they can see more of Google ads. Does Groupon need to be folded into Google's empire to make that happen? It doesn't seem necessary for Google to own an online store to get people happy about online commerce in general.

It would make more sense for a company like Yahoo -- itself the subject of Groupon-acquisition stories -- to make this purchase.

(Another thing to keep in mind: One of Groupon's chief competitors, District-based LivingSocial, was founded and is run by a fellow named Tim O'Shaughnessy who happens to be the son-in-law of Post Co. Chairman Donald E. Graham.)

So far, this story is too thin to predict a deal. It does, however, have one confirmed virtue: It's keeping some of us from writing about a completely contrived topic, "Cyber Monday" online sales. (The Monday after Thanksgiving isn't the biggest online sales day, but maybe this year will be an exception.)

Have an Internet rumor you'd rather see me chase down? Please post your suggestion in the comments.

Update, 11/30, 9:59 a.m. Now we have something more solid to go on. Swisher posted last night that "sources close to the situation"--as in, not just one person--had Google offering Groupon not $2.5 billion but $5.3 billion. I still question the wisdom of that kind of purchase. But maybe it's just me thinking I have quite enough Google in my life already. Do you?

By Rob Pegoraro  | November 29, 2010; 2:15 PM ET
Categories:  Shopping, The business we have chosen  
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Comments

Hi Rob,

I say this in just maybe. I think Washington Post should Buy Living Social, you already have the daily deals and this will give the Post a reach that is local, expand audience and new eyeballs.

If that happens remeber the idea started here on your column ;)

Shashi

Posted by: shashib | November 29, 2010 3:11 PM | Report abuse

I haven't trusted Google since the day they hired that former Ebay exec Stephanie Tillanius. I like Groupon and read their emails every day. Some have fabulous local deals. Google buying it means I will cancel my Groupon subscription. Google has enough of my private viewing information so they don't need my purchasing habits.

Posted by: Desertdiva1 | November 29, 2010 7:59 PM | Report abuse

Hi Rob,
I was about to sleep wondering why some feeds in my google reader told me that google bought the Groupon but the googleblog feed didn't. Thanks for letting us know this is just a rumor.
At the same I cannot stop thinking the meaning of news, which is published from a publish house. A lot of people at my age read rarely newspaper and use rss or read the news online. It seems like the newspaper industry doesn't woo the future us. But this blog just made it clear that how important the news from the professional journalism. I think later during my sleep, your news gonna be shared and spreads everywhere. Thanks to the network again. But whenever we want to examine the credibility of it, the source from here can be trusted.
Besides I also think the new ways we check news. Self-selected RSS feeds are so different from the traditional newspaper. Some argue that people should learn from the iTunes store
 and sell the newspaper per column... Cannot image that.. So afraid that one day we just end up in a cocoon and feel so comfortable in our imaged empire.

Thanks again for the news and best wishes from freezing Germany!

Posted by: JinC | November 29, 2010 8:22 PM | Report abuse

Hi Rob,
I was about to sleep wondering why some feeds in my google reader told me that google bought the Groupon but the googleblog feed didn't. Thanks for letting us know this is just a rumor.
At the same I cannot stop thinking the meaning of news, which is published from a publish house. A lot of people at my age read rarely newspaper and use rss or read the news online. It seems like the newspaper industry doesn't woo the future us. But this blog just made it clear that how important the news from the professional journalism. I think later during my sleep, your news gonna be shared and spreads everywhere. Thanks to the network again. But whenever we want to examine the credibility of it, the source from here can be trusted.
Besides I also think the new ways we check news. Self-selected RSS feeds are so different from the traditional newspaper. Some argue that people should learn from the iTunes store
 and sell the newspaper per column... Cannot image that.. So afraid that one day we just end up in a cocoon and feel so comfortable in our imaged empire.

Thanks again for the news and best wishes from freezing Germany!

Posted by: JinC | November 29, 2010 8:23 PM | Report abuse

I think this will be the first of a few acquisitions in the deal space in 2011. Some media companies will launch or buy programs as a defense against Groupon/Google or whoever the final buyers prove to be. While others will buy small well branded programs so they can offer a deal product to their advertisers and get to market quickly.

Posted by: jimmyhendricks | November 29, 2010 9:34 PM | Report abuse

Groupon is not a good acquisition for Google- it seems like an AOL deal to me. There is literally no good technology to the Groupon deal, no reason for an inflated price. They should position themselves higher in the chain and offer aggregated search and alerting across Groupon and similar deal sites. There are so many emerging competitors.

Hmmm...maybe I should start working on that if they don't.

Posted by: staticvars | November 30, 2010 11:30 PM | Report abuse

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