Google is on the verge of splurging on its most expensive acquisition, at the tune of nearly US$6 billion, almost double the price it paid of ad firm DoubleClick in 2007. Not content waiting idly for the deal to get the green light, online coupon site Groupon has snapped up three similar deal-of-the-day websites and launched in four markets in Asia. Leila Makki reports.
According to reports earlier in the week from VatorNews, Google had inked a deal worth $2.5 billion. Now, the New York Times claims the takeover bid is worth closer to "$5.3 billion, with the promise of $700 million in performance bonuses for management."
The Chicago-based startup, founded in November 2008 in the midst of the global economic downturn, has become an Internet success story - similar to Facebook and Google, with the latter intending to quickly snap it up so it can share in its prosperity.
Groupon's business model is simple: send out daily emails to 33 million plus users offering up to 90 per cent off a local product or service (ie. haircut, zoo admission) and take a 50 per cent cut in a revenue-share deal with merchants. The deal-of-the-day website is profitable - making an estimated $50 million per month and sparking a bidding war between Yahoo and Google.
The web sensation is now available in 300 markets around the world, due to its expansive plans where it acquires rival deal-of-the-day international operations including, European-based MyCityDeal, Japan's Qpod.jp and Russia's Darberry.ru.
This week, it launched Groupon Hong Kong, Singapore, Philippines and Taiwan through the acquisition of daily deal sites uBuyiBuy, Beeconomic and Atlaspost.
“We see enormous potential in the Asian marketplace, and the expansion of Groupon to Hong Kong, Singapore, the Philippines and Taiwan is an important next step,” said Rob Solomon, president and COO of Groupon. “We’re excited to leverage an incredibly Internet-savvy customer base to generate increased sales for local merchants.”
The company claims that uBuyiBuy and Beeconomic are already dominant players in Asia's local collective buying space, whilst location-based social networking site, Atlaspost, was acquired because of the success of its group buying platform launched in August.
Although the terms of the deals were not disclosed, the acquisitions extend Groupon’s reach across East and Southeast Asia, joining Groupon Japan, which launched in August 2010.
Also this week, Groupon launched 'Merchant Store,' an e-commerce platform where retailers claim their store, create a deal, advertise it and limit the number of users who can purchase it. The virtual storefront could help maximise the potential of Google's local listings directory, 'Places.'
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