Groupon is reportedly entertaining a buyout offer of $4-$5 billion from Google.
In the process, it is shopping this offer to other potential bidders through the press.
One name that surfaced last week as a potential bidder was eBay. But a source close to the company tells us that eBay is not involved in the talks.
So will anyone top Google’s $4-$5 billion offer?
There are only a handful of companies that can afford to buy Groupon and have some strategic reason for doing so.
Of these, eBay is apparently not involved, Yahoo can’t really afford to pay $5 billion, and Microsoft has very little strategic reason to jump into this business. That leaves Amazon and Google.
Amazon buying Groupon would make sense–probably more strategic sense than Google buying Groupon. But we doubt that Amazon would shell out the $5 billion necessary to do it. Amazon’s market cap is $75 billion to Google’s $190 billion, so the relative cost to the company would be much higher. Amazon is also not as desperately in need of a new growth engine as Google is. So we suspect that if it came down to a bidding war, Google would win.
So now the question seems to be, when Groupon finishes shopping Google’s offer, will it decide to pursue an IPO–or take Google’s money?
Unless Andrew Mason has an ambition to build the next eBay or Amazon, the answer should be obvious: The company should take the money. $5 billion is not a bad payout for two years work. And there’s enough that could go wrong in this business that it’s likely worth letting Google and not Groupon take that risk.