Besides Yahoo and Google, the other Groupon suitor we keep hearing about is eBay.
We haven’t heard anything as definite as we did when reported that Yahoo made a $3 billion bid for Groupon, but we do keep hearing about eBay being in the running – from one very knowledgeable source in particular.
With $5 billion in cash and strong free cash flow, eBay has plenty of flexibility to make a competitive offer (with cash, stock, or a combination of the two).
It would be a very big bet for the company.
The case for the acquisition:
- eBay’s growth is starting to slow.
- It’s core business is essentially advertising for small, local businesses and Groupon presents a real threat.
- Instead of spending thousands of dollars on Google ads to drive potential customers to eBay auctions, local ad buyers could, through Groupon, just plow that money into discounts for new customers.