Groupon Bankable

A recent article in the New York Times reports that Google has offered $6 billion to acquire Groupon.  Recent reports have also indicated that Groupon's annual revenues exceed $1 billion and the sites subscriber base has tripled this summer.  So now, the multi-billion dollar question is should Groupon sell to Google, or should they maintain ownership?

Despite an influx of imitators joining the industry, Groupon has managed to stay head and shoulders above the competition by expanding the website to far more locations than other sites.  Groupon is also more flexible with their vendors by offering different commission levels and allowing vendors to promote deals through microsites.  These innovative approaches in the industry are what make Groupon such a lucrative acquisition for a company like Google.  They have been able to grow their company and dominate an industry on their own merit, so it does not seem to be in the owners' best interest to sell the company at this point.

As far as an IPO goes, it is still early for Groupon (started less than two years ago) and a struggling economy is not the best of times for an IPO.  It would be wise for the Internet company to wait and see how Facebook's IPO performs, whenever it is released.

The best thing for Groupon right now is to continue to grow its website and increase market share.  The company strengths that have established Groupon's success, innovation and steady expansion, are the types of success factors that all companies strive for, but cannot always attain.  If Groupon continues operating as it has, the growth of competitors should not threaten Groupon considering how far behind imitators are in the process.  There are specific reasons Google offered $6 billion to acquire Groupon, and those are the reasons the same reasons why Groupon is too good of an idea and brand to sell this early in the process.