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Comment by rishi | Hacker News Reader

Also - Groupon spends a ton of cash on Adwords to acquire subscribers. Google can easily just "out bid" those with their own ads for free.

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It seems that Pandora and other Ad engines are obsessed with Groupon-like advertisements. I am concerned about Ad revenue all over the web if Groupon and Living Social goes under. I hardly think that this type of advertising is healthy in the long-run.

Then again, I do not think Group is concerned about the long-run

There is no such thing as a free lunch. Foregoing of Groupon ad revenue is no different than buying the ads.

Of course, google can put an ad on the homepage. Since they don't sell that inventory, it is about as close to a free lunch as you can get.

Not really sure I agree with you here. #1 They can look at all the Groupon numbers in their adwords account and figure out which ads work and place ads for only those keywords #2 They can place their ad above Groupons and still collect that revenue (so no revenue loss there)

I agree that they could have a strategic bidding advantage by looking at the details of other advertisers' campaigns. I disagree with #2. If Google puts their ad above groupon's ad, and they get the click instead of groupon, then they forego the revenue. If they out bid for display ads, then they also forego the revenue.

Is Google known to use AdWords in this manner?

No, the Offers team will have a marketing budget and bid through adwords just like everyone else.

Google has promoted their own products on their own sites outside the ad system in the past, but they got a bunch of greif for it. There is a Chrome ad on the homepage today that targets old IE browsers, but that is the only exception I am aware of.

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