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The following is a guest post by Mobile Guru.
News of the recent rumored blockbuster deal has come out that indicates the deal is dead. Whether Groupon turned them down, Google wizened up, or both sides wanted to go it on their own is unknown at this time. One piece of news that did leak was Groupon is currently doing roughly $2B in deals of which they keep half. so if this is true they are doing $1B per year in revenue and growing like crazy.
What’s the real impact here? Let us first consider that with any potential buyout of a company, the acquiring company looks at the deal from a make verse buy perspective, or at least they should. When they look at a make basically they are deciding what does it cost for me to get into this business if I were to start from scratch. Do they have the resources and funding? Are there any technical barriers to entry such as proprietary software or intellectual property? Are we too far behind the curve that we can not catch up?
From Googles perspective, I don’t see anything that says they can’t basically replicate the exact business model that Groupon has especially now that they have probably gone through in great detail exactly how it works during the negotiations. Google has resources and funding far superior to anyone in the world. There is no entry to barrier and Groupon with trying to buy IP shows they have no IP of their own. In addition, Groupon and Livingsocial have basically developed their businesses in the last year and look how far they have come. Does anyone doubt Google can do it in less time?
On the buy side of the analysis Google should have looked at:
- Market share
- Revenue growth
- Profitability (Google can afford patience – i.e. YouTube)
- Expansion within & outside of the US
- Intellectual Property
- Talent … [visit site to read more]
