Potential Groupon Sale Is Entrepreneurial Success Story

The price Google is reportedly willing to pay for hyper-local deal site Groupon has doubled in a week.

Image: Courtesy of Groupon

First, the rumors were that Google was looking at buying two-year-old location-based web deals company Groupon for a bit more than $2 billion. Now, the price being batted around has more than doubled.

Numerous news outlets are reporting that Google is looking at buying the fastest-growing Internet startup in history for between $5 billion and $6 billion, based on unnamed sources. It’s an eyebrow raising price indeed for a company that was just started in 2008.

So what makes Groupon so special?

Well, it gives Google one more weapon in its push to remain the dominant advertising engine on the web. Google derives more than 80 percent of its revenue from advertising. Groupon would add a hyper-local element to Google’s advertising model.

And, as the New York Times points out, the acquisition would fit Google’s previous history of buying up advertising companies. The search giant has already bought ad-serving firm Double-Click.

Also, in its two years of existence, Groupon’s growth should be the envy of such firms as Facebook or Twitter, since its growth has meant actual money flowing into its coffers, and at a pretty impressive rate. In just two years, Groupon’s estimated annual revenue has reached $350 million. And its founder, 30-year-old Andrew Mason, has managed to achieve all that far from the Silicon Valley hotbed of tech firms.

Groupon started in Chicago, not the San Francisco Bay area, with $1 million in seed money from Mason’s former employer, Eric Lefkofsky.

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