How Soon Might Google's Deal with Groupon Follow Amazonian Investment?

Now that Amazon’s $175 million investment in social buying service LivingSocial has been confirmed, all eyes will inevitably be turning to Google, as it nudges closer to completing a blockbuster acquisition deal with the category leader, Groupon.

But, according to several sources, the Google-Groupon hookup still has roughly a half-dozen issues remaining.

Previously, BoomTown’s Kara Swisher reported that Google has offered $5.3 billion for Groupon, which, with earnouts, would rise to $6 billion.

A deal of that size would be Google’s largest acquisition yet, so attention to details is warranted. Of course, negotiations could collapse at any time, but sources said the deal is currently on track.

Perhaps a major investment by Amazon, like today’s, might help clinch it.

The next order of business will be to examine whether these hefty price tags are all worth it.

Half-jokingly, LivingSocial’s two-week-old CFO John Bax said today at Business Insider’s Ignition event that valuations are not overinflated: “I think [Google is] getting a steal, I think they are underpaying…[Groupon] should hold out for $12 billion or $18 billion.”

LivingSocial has said it is currently booking an average of more than $1 million a day and is projected to ring in more than $500 million in revenue in 2011. Meanwhile, Groupon has raised about $170 million in venture funding, and is booking roughly $50 million in monthly sales, according to some estimates.

But, if the space is truly a golden opportunity, why aren’t others rushing in? So far, we haven’t heard about these deals becoming a competitive bidding process, and Microsoft and eBay have been silent on the matter.

Today, eBay made a comparatively small purchase of Milo, which catalogs the availability of millions of products in local stores so that they can be searchable by consumers online.


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The problem with the Billionaire Savior phase of the newspaper collapse has always been that billionaires don’t tend to like the kind of authority-questioning journalism that upsets the status quo.

— Ryan Chittum, writing in the Columbia Journalism Review about the promise of Pierre Omidyar’s new media venture with Glenn Greenwald