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.