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Grope On, Google

Posted by Bill Lee on December 2, 2010 at 12:45 PM

Google's impending offer of an astounding $6 billion for local deals site Groupon is earning some brickbats: A Forrester analyst called the mulit-billion dollar offer "absurd" for a two year old company that has virtually no barriers to entry and that's "younger than my toddler."

It's questionable whether Groupon has no barriers to entry, but "Google Groupon" would certainly have a big one: how many coupon sites have the majority of the world--including your local neighborhood--conducting their Web searches for restaurants, spas, jimmy cho uggs, etc. on their site every month? Add to that Groupon's relationships with local advertisers who are responding in droves to the service, together with a sales force of about 1500 (half of its 3000 employees) according to the WSJ, and Google Groupon could now blanket local communities with that value proposition. And then there's all that data G-G could accumulate . . .

Btw, those relationships with local advertisers are clearly a critical piece to the high price Groupon would fetch; it's platform isn't all that big a deal. Let's see now, who else has close (and unlike Groupon) longstanding relationships with a lot of local advertisers? Newspaper publishers--there may be light at the end of the tunnel for you!

 

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