Photo: Dan Frommer, Business Insider
Google hasn’t bought Groupon yet, especially for the $2.5 billion chump-change reported yesterday, but it has put a whopping-huge offer on the table, says Kara Swisher.Google has offered $6 billion for the Chicago-based company: $5.3 billion now, with a $700 million earnout.
That is an enormous pile of money, and Groupon should take it.
This price seems high, but Google is smart to be aggressive here. Its core business, search, is maturing, and as yet it has been unable to develop a second major growth engine. Also, because one of Groupon’s biggest costs is buying Google AdWords, there should be significant synergy between the companies. And Google has $33 billion of cash sitting around burning a hole in its balance sheet.
That said, the integration will be very challenging. It’s hard to think of two big companies that have more different cultures.
Google’s DNA is engineering, Groupon’s is sales and marketing. If the integration is handled well, the companies could complement each other by sharing these core competencies. If it is handled badly, however, the combination could be a disaster.