14 DAY TRIAL // The Google - Groupon deal is looking more solid with several new sources confirming talks between the two companies. What's more, there is a new, more realistic price $5.3 billion plus $700 million in earnouts. The price is closer to the more recent valuations for the group buy site and is certainly within Google's reach, but it would be quite a win for the two-year-old company.
The talks, according to All Things D, are in the late stages and a deal may come as soon as later today. However, they have not been finalized and the deal may still not go though.
At this point, most people agree that the move would be a smart one for Google as it would instantly put it at the top of a fast growing and profitable market. However, there are some reservations about the price as not everyone is convinced the deals site is worth $6 billion.
Groupon is the fastest growing company ever based on its estimated valuations. The company raised about $170 million in venture capital. It raised $135 million in its latest funding round lead by Digital Sky Technologies, now Mail.ru Group, which owns about five percent of Groupon.
At the time the startup was evaluated at over $1 billion. The figure grew fast and the latest number put it at $5 billion. Part of the reason why the company grew at the rate it did is that it has managed to ramp up revenues just as fast.
The company is said to be making about $50 million per month and is on track to make about $500 million this year. Revenue is expected to top $1 billion per year in the next couple of years.
Even so, Google would be paying about ten times more than Groupon's yearly revenue. With a company that has been growing so fast in a volatile and new market, it's hard to know if Google's gamble will pay out in the end. It would be Google's biggest acquisition to date, by a large margin, but it can certainly afford it, it has over $30 billion in cash.