Yahoo Looking At Buying Groupon

carol bartz yahoo ap

Yahoo is looking at acquiring Groupon, Kara Swisher reports.

Bravo for Yahoo! This would be a huge acquisition of one of the hottest growing web companies out there.

But the question we have: Can Yahoo afford Groupon? It was valued at $1 billion in its most recent round of funding. Its revenues are estimated to be $200-$400 million this year.

If Yahoo wanted to buy it, it might have to shell out $2-$3 billion for the company. Yahoo has about $3 billion in cash, and a market cap of $20 billion. Buying Groupon would be a big deal.

To get the deal done, either Groupon would have to accept Yahoo stock OR Yahoo would have to float a bunch of debt.

Anyway, Swisher says, “a deal is far from done.”

Update: Groupon founder and CEO Andrew Mason offers his take on the news. Sort of.

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