Yahoo made it known to Groupon executives and backers that it was willing to pay as much as $3 billion to $4 billion to acquire the company, a source close to Groupon investors tells us.
That number may seem high, but our source is reliable.
We cannot report that an official offer was made. Call the pitch an “offer-to-offer.” Kara Swisher earlier reported Yahoo’s interest in Groupon.
A separate source close to Groupon tells us that the company is currently undergoing a semi-annual review of its long term options. The Chicago-based company is deciding between an eventual IPO, opening itself to acquisition talks with bigger companies, or raising more capital.
Yesterday, Bloomberg reported that Groupon is looking to raise money at a $3 billion valuation. Groupon raised $135 million at a valuation above one billion dollars in April.
Groupon sends email subscribers a coupon each day. The coupons only go into effect after a certain number of people buy them. The product is popular with local businesses who want to use the Internet to get customers in the front door, but don’t want to put up cash outlays or run Web sites. There’s been a small backlash against Groupon from small business that say it sends too many new customers.
The company currently has 3,000 employees serving markets in 29 countries. Internally, it is believed to be “many, many multiples larger” than its nearest competitor, LivingSocial. We’ve heard CEO Andrew Mason say similar things on TV before.
One thing to remember about companies like Groupon is that they are constantly on the receiving end of merger and partnership feelers from the corporate development departments of larger companies. Just look at the long list of companies that tried to buy Facebook in its early days. The source close to Groupon tells us the company is currently undergoing a similar barrage of attention.
Besides Yahoo, other potential Groupon suitors include Amazon, Google, and eBay. In particular, we’re hearing more talk of an eBay-Groupon merger than we would have expected. eBay has about $5 billion in cash and short term investments, so a deal is plausible. An industry source tells us Google’s Marissa Mayer is particularly keen on Groupon. Mayer declined to comment.
A source close to Yahoo did not deny the offer-to-offer, and tells us the view from there is that Groupon will go public.
Groupon CEO Andrew Mason declined to comment for this story, telling us: “I totally was going to comment except the way you asked for my comment suggested that maybe I shouldn’t and I didn’t want to let you down so I decided not to comment.”
We reached out to Yahoo for comment and have not heard back. We don’t expect them to say anything.
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