Sources: Groupon rejects Google’s offer; will stay independent | Hacker News Reader

Sources: Groupon rejects Google’s offer; will stay independent

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90 pointszone411118 comments

No doubt, Groupon prints cash. However, as far as I can tell (and I have actually done significant research and thinking about this type of business) they are far more lucky than anything else.

Not to say they didn't execute well, clearly they did, but there have literally been hundreds of companies both before (restaurant.com, 1999, val-pak, Entertainment Book) and after (Facebook, Google, Yelp, FourSquare, AOL, LivingSocial, DailyCandy, Zip2Save, + thousands you've never heard of) doing nearly or exactly the same thing.

IMO Groupon was indeed crazy to pass on this deal. I agree with others saying that there is a high risk that they will be worth far less in a few years.

Why?

Their model is not strategically defensible, and there are very few barriers to entry. Look around, anyone with a mailing list or customer base is entering the deals space.

Besides that, in the end, Groupon makes money by giving away other people's money. It's great work if you can get it, but this type of business gets very hard to scale past a certain point. While it's great for certain kinds of businesses, it also incites a race to the bottom. I think that over the next few years businesses will get wise to the model and revert to more sustainable discount levels for the majority of situations.

In the meantime Groupon will continue to print cash but in the long run there will not be one winner in this category, it will end up very fragmented and very competitive (read: high costs and low profit margins).

You've summed up precisely what I haven't been able to put into words about this.

"Besides that, in the end, Groupon makes money by giving away other people's money."

You mean like Adsense?

idiots...2 years from now, when all the businesses know what a bad value proposition Groupon is, they'll look back and kick themselves for not taking the offer

Comments like this reflect more on their author than the startups and management teams they're about. Have you ever been inside a startup, and seen how one one-thousandth of the relevant information ends up in the press, and even then it's distorted? We don't even have more than rumor that this deal exists -- that should hint to you the quality of your information. These players aren't stupid. You have no idea how much you don't know here.

I would agree the devil is in the details because from the outside this doesn't seem to make sense.

A lot of the talk is from people who (should) have low confidence in their predictions. Meaning, there's a 80% chance this is bullshit, but hear my out anyways.

Yes, many of the facts are wrong. The conclusions are wrong. So why should we still discuss?

First, it's fun. Like a sport for us to watch (and some to play :).

More importantly, though: Forcing yourself to open your eyes, stay engaged and keep an active mind about what's going on in the world. To practice thinking things through, even with limited information (you'll never have 100% information). This encourages curiosity - so you get more involved, ask questions, do research. Overall it helps you learn how the world works.

Amen.

Your analysis is wrong; here's why. The founders, employees, and other insiders of Groupon have already been handsomely paid off. For them, Groupon represents a free option. If it sells for $6 billion, great! But what if in 12 months it could be worth $10 billion? That's $4 billion more! And, compared to a site like YouTube, Groupon looks like a much more stable deal. They're already immensely profitable (something YouTube never was, and still isn't). The $5.3 billion offer, as a multiple of revenue and profit, was a surprisingly cheap offer for Groupon!

Maybe Groupon will look back in 2 years with regret. Or maybe they'll have an offer of several billion dollars more. For the people in the position to make the decision, the risk is worth it.

Do you know somewhere else with as good a chance as Groupon of making several billion more dollars in a year?

TechCrunch reported they'll do 50m in profit this year, so it's not exactly cheap. If they were to stop growing it'd take 100 years for Google to get their investment back in cash.

The question is when they'll stop growing.

I agree with you but your rhetorical question isn't right. If you're Gates with several dozen billions, it is trivial to "earn several billion more dollars"; But if it means I have a 50% chance of losing 10 billion and 50% chance earning 7 billion I wouldn't do it.

The same goes for groupon; From the outside it looks like the founders are risking their entire 5.3 billion for a mere 100% increase in a couple of years time. Of course, like other comments say, we know very little; but I do concur with the original comment saying it looks crazy.

Can you (or anyone) elaborate on "The founders, employees, and other insiders of Groupon have already been handsomely paid off."? My understanding is that the handsome payoff comes when the company is either bought out or IPO's

Does anyone remember PointCast? In 1997, they rejected an acquisition offer of $450 million from News Corp. Two years later, they sold the company for $7 million.

http://en.wikipedia.org/wiki/PointCast_(dotcom)

Google's reported multi-billion dollar offer for Groupon seems like a pretty good deal for the company's founders, investors, and (presumably) employees.

Does anyone remember Facebook? In 2006, they rejected an acquisition offer of $1 billion from Yahoo. Four years later, they're clearly a juggernaut of social networking.

http://en.wikipedia.org/wiki/History_of_Facebook#Financials

There are far more Pointcasts than there are Facebooks.

But the existence of Facebooks depends on at least some founders believing that they're Facebooks, not Pointcasts.

I don't think that's true, if you control for time. Can you think of other examples of startups that turned down acquisition offers in or around 2006 and are now regretting it?

1) Digg turned down an acquisition and regrets it. That was probably around 2006.

2) I'm pretty sure LinkedIn could have sold for a mighty sum in 2006. My guess is they're pretty nervous that Facebook will subsume them. They might wish they had sold back then for $1 billion or whatever.

3) Very speculative: Xobni, but that was 2008.

4) Technorati may have turned down an offer in late 2005 that they would definitely take today.

I'm not sure these prove anything, I just had fun trying to think of them.

I don't know of any offers LinkedIn or Technorati turned down, and I know Xobni doesn't regret turning down early offers.

I agree Digg got an offer they probably regret not taking.

What's your point? How many Pointcasts there are and how many Facebooks there are is irrelevant. All that matters is whether groupon is a Facebook or Pointcast.

Or somewhere in between, but what really matters is who ends up making money in the transaction.

If there are more Pointcasts than Facebooks that would infer that it would be statistically more probable for this company to be overvalued than undervalued.

Pointing to outliers and using those as examples of good decisions doesn't seem very wise. Sometimes you get lucky and hit it big, that's how the game works. Sometimes that risk bites you down the road, a la Pointcast.

"Pointing to outliers and using those as examples of good decisions doesn't seem very wise."

It's wise if you are an outlier. And Groupon seems to be an outlier to me.

The implication is that it is far more likely that Groupon is a "Pointcast" than a "Facebook". But the statement that there are "far more Pointcasts than there are Facebooks" is impossible to falsify.

Is that true? How would you know?

people were and are still trapped with facebook. groupon users have absolutely no reason to be loyal to groupon.

you made a very important point. i hope more people see it.

You could probably take your pick of overvalued companies from the 1997-1999 dot com era. Even if we are in another boom period, Groupon has the revenue, growth, P/E, and market potential to justify the high price tag, unlike it's boom counterparts Twitter and Facebook.

If Facebook and Groupon both IPO'd tomorrow, something tells me Groupon would have the higher market cap, and without looking at numbers, my hunch is it would be the better long term investment too.

Remember, Facebook is already over the uncanny valley - they have 500 million users, and starting to enter a saturated market. Groupon is still relatively small and has a long way to grow.

If Facebook and Groupon both IPO'd tomorrow, something tells me Groupon would have the higher market cap...

Sorry, you're wrong.

Google purportedly just offered Groupon $5 billion. That's my best estimate of Groupon's probable market cap.

SecondMarket just did an auction of stock in a company whose sole asset are some shares in Facebook. Based on this, my best estimate of Facebook's market cap is $50 billion. (See http://www.pcmag.com/article2/0,2817,2373614,00.asp for more on that auction.)

If Facebook and Groupon both went public on Monday, Facebook would have a higher IPO. But in the space of a year or two, Groupon would have the higher market cap. Facebook's valuation is based on a lot of hype and not very much revenue potential. Groupon's valuation is far more likely to survive sober, realistic analysis outside of the Valley echo chamber.

Little revenue potential? That's a crazy thing to say, anyone with 600 million users has a fairly decent revenue potential... Now what about when you know every single detail about those 600 million people's lives... HUGE revenue potential.

It doesn't matter how many users you have or how much information you have if you can't monetize it, especially when you have to categorically rule out all the obvious options (charge people money to use the service, sell people's private information) and other feasible options (sell devices designed to integrate with Facebook) are instantly shot down by the company's own efforts (free iPhone and Android apps).

Maybe Facebook will find a way to make tons of money, rather than merely tons of hype. As it stands, I bet the number of users they have represents high cost rather than high revenue potential. It's definitely too big to go away, but unlike Groupon, it also hasn't found a way to make tons of money yet, and no method to do that seems forthcoming.

Or the coupon thing is just a novelty that people will get tired of, for one of any number of reasons.

Groupon also turned them down, so what does that mean?

I guess we'll just have to wait and see, huh?

Secondary markets don't mean anything, let's see if the big investment banks, pension funds, and the real market movers are going to appreciate Facebook's tiny margins and slowing growth.

Again, I don't have the numbers, and no one outside of direct involvement with Facebook (or Groupon) does either, but with the numbers being thrown around, Groupon has so far demonstrated much more capability for running a fast growing, profitable, high margin business.

Funny, the instant I read the headline, Pointcast came to mind.

well said but these deals tend to be more complicated than just the figures. google might have put in the conditions or groupon might have their own wishes.

When they raised money last time, most of the decision making folks(founders and such) cashed out already with $160M http://techcrunch.com/2010/04/15/the-rest-of-the-details-on-... So they are not in hurry

Looking from google's point of view, not sure how they would have answered their investors. 500M revenues -> 150M-75M income(assuming 30%-15% profit margin) http://www.businessinsider.com/what-are-groupons-real-number... that is a 12x - on revenue and 40x - on income. Just doesn't make sense.

It's been reported[1] that revenue is actually $2 billion, not 500MM.

[1] http://kara.allthingsd.com/20101203/exclusive-groupon-annual...

As mentioned in the article she is quoting gross merchandise sales not the gross revenue. As with groupon's business model, they pay ~70% of that to merchants.

Refer the first link from businessinsider.com on the estimations.

GOOG itself has a P/E of 23x [1]. 40x for a fast growing company is not crazy.

[1] http://www.google.com/finance?q=goog

as some of the people already mention, numbers were "leaked". There are too many incentives to make up sources (page views, manipulate google share price, to solicit more bids...)

revenues numbers are meaningless if you don't see the books for yourself. For example, a company can give 10 dollars to all new users. If this company has 35 million users, and takes in 30% of each transaction, that's 105 million dollars in revenues it can report. We wouldn't know.

Only the future will tell if it's a smart or stupid move. I think the article don't give an in-depth knowledge about the acquisition, thus, since we don't know the ins and outs, we can hardly decide/predict.

I also thought that it was a good offer, however, when I read that their earnings are at $2Bn and they have 3,000 employees.. that's already huge. They might have bigger plans, they know better the market and if they can double or triple their profits.

"$0.5Bn"

(Allegedly) That's just per quarter. So x4.

With $2 billion revenues that are likely to continue increasing YOY, it looks like an embarrassingly low offer.

http://kara.allthingsd.com/20101203/exclusive-groupon-annual...

"Likely to continue increasing YOY"? Says who? Groupon?

At least one compelling academic argument why Groupon's 'deal hawk' business model is not built for sustainable growth:

http://docs.google.com/viewer?a=v&q=cache:cpoGFpYf78oJ:w...

Could you elaborate?

The survey says that Groupon promotions are profitable for two thirds of businesses and three of five (of all businesses) would run another Groupon promotion again.

Hah, funny how such reason and logic didn't make it to the top of hacker news. Great link, thanks.

I bet you said the same thing about Facebook when it rejected that $1B Yahoo bid 4 years ago.

I did, actually, which is why I no longer trust my own opinion on these things.

On the surface, Groupon probably is not that bad of a deal for businesses compared to the cost of acquiring customers through local advertising. The problem is that businesses get a bunch of customers who buy once, and go away.

That's not a great value proposition for every business, but you would be surprised how many local businesses would take these deals any day of the week. Groupon will find its sustainable niche of businesses to work with, the bigger question is whether consumers will continue to flock to those particular deals.

I'm curious if you had the same opinion when they reportedly turned down a three billion dollar offer from Yahoo.

LoL )) i wish somebody call me idiot for refusing 6B deal. who are you to judge? dont u assume they know something you dont? all i can say these guys have balls to make such decisions.

I used to think the same thing when FaceBook rejected a billion dollar offer from Google, I believe. Boy, was I ever wrong!

was not that Yahoo?

Maybe it was Yahoo, sorry. I can't remember.

Thinking of Yahoo, why in the world doesn't Yahoo push Flickr as a social network? They certainly have all the tools in place (photo, video, users, groups, ads) that have always been superior to FaceBook.

Personally, I think Flickr could put FB to shame. Maybe the die hard photo fans wouldn't like it, but if you want to push advertising revenue I think they have a gold mine.

Yahoo! Anyone there listening?

As a user of both - dear God, no!

Flickr has a pretty large and pretty serious audience of users who at least regard themselves as proper photographers. A good portion of the (me included) pay for the pro accounts.

Flickr could, I'm sure, be tweaked a bit to let you more easily keep track of your friends other than through their photos - journals, one-line 'status updates', link sharing and the like. But how would this not alienate their already large and paying constituency of photographers, or their developing relationship with Getty as a supplier?

Honestly, I can't see how this would be a probable net win for Yahoo.

Maybe part of the problem is that they are in Chicago. Seriously. They aren't in the Silicon Valley ecosystem which if they were they would know that there are tons of scary smart people at well funded startups working lots of projects in their space. That might make they realize what they're up against.

I don't think a company needs to be located in the valley to know that there are "tons of scary smart people at well funded startups working lost of projects in their space"

There are lots of scary smart people all over the world. True, there are more scary smart programmers in SV. But that doesn't mean companies can't find them elsewhere.

Groupon could have taken a lesson from my grandma:

"A bird in the hand is worth two in the bush."

$6BB today invested in AAA bonds for ten years will be more than their corporate valuation after their deal hawk coupon site's novelty wears off. Eventually Facebook, Twitter or Google will create better 'hyperlocal' business models and monetize the long tail of local search with their massive reach.

Good luck bros.

a) I thought the whole AAA thing had been found to be bankrupt? (Honest confusion.)

b) How many companies who turn down seemingly-huge acquisition offers turn out later to be 'just' whatever they were doing at the time of the offer? Most startups at any stage don't stay fixed at doing 'just' whatever they're doing at that stage.

Ten-year Treasury yield is 3%. $6 billion invested today for ten years would return $8 billion. Their valuation could be several billion more than $8 billion in less than 2 years. You might be right about the coupon sites being a novelty, or maybe Facebook, Twitter, or Google (or, some as yet unknown competitor) will "monetize the long tail"...

But... the founders, employees, and other insiders of Groupon have already been handsomely paid off. For them, the chance at several billion dollars more in a few years time is worth the risk of rejecting the Google deal.

"A bird in the hand is worth two in the bush."

And said bush is surrounded by a ring of fire. And explosives. And zero humidity.

Regardless, we don't have all of the data - hard to tell from outside

True, we don't have all the data, but we do know that those two bush birds are already producing millions of dollars in profit a week.

This was smart. Let's be clear: Google needed Groupon's local advertising smarts more than Groupon needed anything from Google. It's not like free AdWords would change the limiting factor on the Groupon model - the limiting factor on the Groupon model is the speed with which Groupon can add cities and salespeople: two things where Google can't help one iota. And, to date, Groupon has shown an ability to expand faster into new cities/countries than LivingSocial and all the also-rans.

I also don't think group buying is going away in, say, 20 years. It's such a ridiculously perceived risk free way (no cash upfront? fuck yeah) for local businesses - really, any businesses - to get additional visits/customers that it'll be a part of the marketing mix forever.

> Google needed Groupon's local advertising smarts more than Groupon needed anything from Google.

Except cash.

This was by far the best possible hope of returning money to the investors and shareholders. Their fiduciary duty is to return money to investors. They failed.

It was an absurd home-run valuation that any venture firm would be happy with. And they are all but begging Google to compete head-to-head. Remember that Google knows everything about you already (Gmail, Google Checkout, Google Maps...); it would be easy for Google to target a buying service not only to your city, but also to your exact buying habits.

> [..] they are all but begging Google to compete head-to-head

Except for the part where Groupon provides an amount of hand-holding for businesses, that G has neither history, nor reputation of doing.

Historically relevant datapoints: G has both a buying service[1], and an affiliate network[2], neither of which seems anything remotely close to the success that Groupon is enjoying already.

[1] http://www.google.com/prdhp?hl=en&tab=wf#t:0

[2] http://www.google.com/ads/affiliatenetwork/

"Except cash."

Like Twitter & Facebook, they have access to all the money they could ever want. Plus, Groupon's revenues are through the roof right now, right on par with Facebook's.

"Cash" to return to investors, not to take from new investors. Taking new investors (especially at such a crazy valuation) just raises the expectations even further and makes Groupon have to take ever bigger risks.

I mean, seriously, a $6 billion valuation (if real) is $20 in _profit_ from every man, woman, and child in the United States. Not revenue, not EBITDA, but true profit returned to investors in 2010 dollars. That is a through-the-moon valuation.

Groupon isn't a personalization play; it's an anti-personalization one. Literally the deals only happen if many people want them. While interesting and valuable, incredibly detailed targeting is kind of tangential.

>> it was an absurd home-run valuation that any venture firm would be happy with

If that is the case, then why aren't the investors screaming bloody murder?

Who says they're not? Quietly screaming, of course. We only have vague reports that there was ever even a deal in the air.

Management's fiduciary duty to a company's shareholders is to protect the shareholders' investment. The duty is not about "returning money". If it was, then dividends would be mandated any time a company saw profit, and management would always have to accept buyouts returning even the slightest iota of gain.

Google can implement their self-serving ad platform technology (AdWords) to automate the 2,500+ person sales force that works at Groupon. Groupons profit margins would skyrocket.

I see a similar sentiment in this comment section that I saw around the time Facebook rejected the 2 billion acquisition offer from Yahoo.

The fact is, this company has executed well enough to reach a large revenue number very quickly. It's easy to say if you don't work there that they should have sold, but putting myself in this company's shoes, I think their growth potential is actually much higher not being a Google subsidiary.

Yeah, but where's their moat? Contrast to FB -- the value of the network increases as more people are in it. How does groupon build a moat? Just because more people groupon, does it make competitors less valuable? Is it a barrier to have emails from livingsocial and groupon arriving in your inbox every day? Groupon is almost the complement of fb -- fb had huge lockin, but no obvious monetization method. Groupon has obvious monetization, but no lockin that I can see.

I also question in the long run how many businesses have large enough customer LTVs that selling stuff below cost is worth it to hook customers. Hearing from eg hair salons that groupon people aren't customers but are bargain hunters isn't promising.

My prediction -- in 3 years, groupon will regret this if they haven't found a different sucker. Maybe comcast?

I'd be happy to be wrong -- it's always awesome when people succeed.

Groupon has a great network effect. They have 25MM users and tens of thousands of local businesses. It's not as good of a moat as FB but still damn nice.

Also, I'd argue that FB has a very obvious monetization: advertising. They supposedly generate $1B+ in ad rev.

25 million members of a mailing list is not a $6 billion defensible advantage.

But in 2005 -- or when the Y acquisition was being debated -- it wasn't obvious that fb would be able to monetize their enormous quantity of pageviews.

In any case, the enormous email list groupon has is awesome... but I think LivingSocial will be able to replicate that. And once you're on both email lists, then what does groupon have over competitors?

What's Amazon's lockin? Apple's moat?

The fact that a zillion Groupon clones are springing up shows that this market is HUGE. Lockins, moats don't matter.

Regarding customer satisfaction, if the majority are happy then it's OK. The CEO quoted 98% customers being happy in a recent interview. So the few unhappy stories you hear are probably anecdotes.

Groupon may itself not be a social network, but it knows how to use the power of existing social networks.

You don't necessarily have to be a software company to be a big sustainable business on the web. Web infrastructure and social networks are now commodities, and the most creative businesses will make a lot of money utilising them.

amazon's moat: cheap prices via the infrastructure they've built around efficient storage, warehousing, and delivery. Try finding most of the stuff they sell for materially less money once you take into account delivery costs. A deserved reputation for great customer service. Variety. Amazon prime -- $79 / year and I just don't bother shopping anywhere else. Kindle -- a 3rd gen ereader with an experience no one else replicates. Their huge marketplace of used books -- practically every text I want can be had for less money by buying used, but only on their site.

Apple's moat: for ipod: your music library that doesn't play on any other devices. Their ecosystem of products that all work together and become more valuable the more apple stuff you have. See airplay ( http://www.apple.com/itunes/airplay/ ) or how apple tv streams video from apple devices. For their laptops, as Gosling said, it's a unix with qa and taste. For iPhone, your app library, your music, and selling devices with quality and taste.

Agreed but if someone had the balls to compete with either of those, there's nothing stopping them. Zappos has shown that the way to beat Amazon is not by competing on price.

Groupon is an advertising company, which knows how to leverage technology. It's not like they invented email marketing. They just know how to use it damn well. When you are selling other people's stuff, the only limitation is how much stuff other people are selling, which is apparently infinite. See Google.

For a company with no unique technology or equipment to turn down an offer that ranks them as a mid-cap company is mind boggling to me.

Delta Air Lines has a market capitalization of 10B! And they have 725 freaking jets!

Dr. Pepper has a market cap of 8B! And they have the pepper song!

CarMax has a market cap of 7B! And they have fleets of cars!

And almost more than the GDP of the The Bahamas (7B)!

Groupon just earned themselves massive exposure. The media coverage of these negotiations elevated their profile beyond their existing user-base and solidified their reputation as the preeminent group-buying site.

I really hope they understand that a large in use medium such as google itself or facebook will simply clone functionality of groupon and tweak it for it's user base ultimately killing groupon. Groupon has no 'stick' some person in rural anywhere won't have a clue what groupon is or will use it but will know what and might use google or facebook, and that's what counts - worldwide recognizability with everyday use.

I think this a bad move by Groupon. I don't think they have the critical mass yet to win over potential competition from Facebook or Google plus its AdSense network. I see their margins getting smaller. If the numbers that were quoted by the press were correct, it seemed like they had a good offer on the table.

A $5 billion buyout for a company with $2 billion revenues is not a good offer.

I saw this $2 billion number in one report, but nothing close to it in the others. I hope this one report doesn't count gross merchandise sales as revenue. Anyway, EBITDA would be much more relevant and I didn't see anyone claim that it's close to $2 bil.

Supposedly they are at $0.5B/quarter, so the $2B is an annual rate.

Whether or not this pans out, I'm happy to see someone hold out on an acquisition. someone has to resist the temptation of an acquisition to be the next huge thing, and this means groupon has a chance at being the next 100 billion dollar company. Plus, there in the midwest!

Can anyone make the case for why this was a smart idea? The only argument I can think of is that the founders would rather continue the fun of growing their own business rather than having to hand it over to Google right at the peak of its hype.

The founders are already going to be super-rich. This isn't Twitter, Groupon is already profitable and raking in the dough.

That gives them the freedom to ride this thing out and see where it goes. Truckloads of money are great, but this is a chance to build a legendary business.

"The founders are already going to be super-rich. This isn't Twitter, Groupon is already profitable and raking in the dough."

Is there any chance that the founders of Twitter aren't going to be super-rich? Even if in 2 years Twitter is completely gone, I'm guessing that the founders are already incredibly wealthy.

Groupon is profitable in just two years of operation. Twitter is still figuring things out.

I've pursued many acquisitions and I can tell you from experience that your assertion of "continue the fun of growing their own business" is pretty strong for a lot of founders.

Contrary to popular belief, the exit from a startup isn't on the minds of a lot of innovative people.

[edit: spelling]

but! sure, an early exit would be a tough decision if you already have FU money--but what about 6 billion dollars? you're talking about being unconditionally in love with what you are doing in this particular business to pass on 6 billy.

There are a lot of founders that could care less about fu money. The fact they made it to "this" point validates their effort. It also emboldens them to keep going...

Sometimes it is a suicide pact with themselves, and in rare other times it results in a huge breakthrough.

Welcome to entrepreneurship ;)

I'm not sure if this is the decision I would have made if I were on Groupon's board, but as an outsider I am delighted to see this, because now we get the chance to see if Groupon transcends being a mere coupon site and succeeds at fundamentally changing the nature of commerce. How they grow into new areas and defend their (from the outside, apparently) vulnerable turf will be fascinating, and as an entrepreneur there will be a lot more to learn from the Groupon story watching them be independent than seeing them become part of Google.

Honest question: How many companies have had multi-billion dollar acquisition offers from large public companies and then NOT gone on to have valuations much higher than the offer? Obviously the ones off the top of my head-- Google, Facebook, whatever-- could be entirely survivorship bias.

Even so, my instinct when reading this article is that Google was stupid not to double their offer, assuming they were going to be competent enough not to ruin Groupon once they bought it.

I feel Groupon has had great success so far due to the economy.

Businesses are looking to make any kind of money while consumers are looking to save as much as possible. Groupon offers this to both users.

I spoke to a family friend that owns a restaurant and ran a Groupon offer, they are less than pleased with how it turned out. Never have they seen so many "customers" come in and not leave tips for their waiter/waitress and none are repeat customers.

all you people calling them idiots, did it not cross your mind that they may just enjoy running the business as it is and don't care for the massive payout?

as long as they are making good margins they can do whatever they want.

The people I feel sorry for are not the founders, who are going to be rich whatever happens, but the early employees who might have wound up rich immediately with a Google buyout, but now have to face ongoing uncertainty.

I don't feel sorry them at all. Not one little bit - it's a job, you work, you get paid, life is good.

Who I feel sorry for is people who are not employed and are trying their best to keep their heads above water.

They had multiple founding rounds. I doubt it was people actually running this business day-to-day making this decision.

another plus for rejecting the goog: if groupon continues on and goes public / stays independent but super-profitable, then there is one more company that can serve as acquirer to all the great stuff produced from this community and others, especially ecommerce type startups. more fat wallets as acquirers = goodness all around for hacker news and friends. just sayin.

Something to bear in mind: these Groupon guys are some pretty business savvy dudes. They've started several very successful companies in the past and likely have a very good idea of where they're going with this. I wouldn't dismiss their rejection so hastily.

Lucky escape for Google if true. This is not the long term shopping model you're looking for.

You know what's cooler than six billion dollars? Nothing, you idiots, take the money.[1]

[1] http://twitter.com/#!/DavidKaneda/status/10857535430983680

Balls of brass.

brains of ass

Just read this to understand why.

http://37signals.com/svn/posts/1927-the-next-generation-bend...

I don't get why Google doesn't simply clone Groupon. The barrier to entry seems very low and I can't imagine how they couldn't replicate their business for 5B$.

Does anyone else think this dance was just to get a baseline valuation from a serious buyer before they IPO'ed?

It seems like there is too much resolve in this decision to pass.

The photo on that article is surreal.

Looks like a smug teenager in a t-shirt surrounded by old men in suits, grinning (at how much money he's making them?)

Groupon has just missed their bebo moment.

You're making a mistake Groupon!

Rule of thumb I have: never never never never never ever turn down a $6 billion buyout offer. (If I don't already have FU money in the bank.)

So much about software buyout valuations is based, directly or indirectly, on speculation and fads that you're taking a huge gamble to turn one down.

Another damn student of the Jerry Yang school of acquisitions. #fail

That CEO guy looks as douche-y as the Facebook guy.

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