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Comment by billswift | Hacker News Reader

I suspect Google was looking at the possibility of modifying it to fit in with their advertising business. I can envision several ways that could have worked out.

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That's a little weasely, because the people calling Groupon a Ponzi scheme tend to talk about how minimal their competitive advantage and technological "moat" is. Google can build stuff. Why'd they try to buy this?

It wouldn't be right to assume that because Google has many smart people, everything they do as a result is smart. Google is hardly an innovative company anymore. In fact, they seem mostly to be coasting on existing models and paying lots of people mostly just so that they don't work for existing and potential competitors.

I think this is a fallacy stemming from the fact that Google's initial products were so unbelievably successful and important that they are likely to be permanently hard to top. I do not agree with you that Google is no longer innovative, and I particularly disagree with the notion that they are so uninnovative that they'd believe they lack the technological prowess to compete with Groupon.

Oh, I don't mean to suggest that at all. I'm just trying to suggest that an offer from Google doesn't, to me, at present imply that the offeree has any special merit. Google is cash-rich and can use cash strategically.

Google search and gmail are hard to top, certainly, but their product prowess doesn't seem to be scaling with their engineering resources at all.

I haven't been one of those calling it a Ponzi scheme or any other con, because it pretty obviously isn't; it has problems and I doubt it is sustainable, but not for those reasons. (Megan McArdle on http://www.theatlantic.com/business/archive/2011/05/why-does... "One study found that 32% of Groupon merchants lost money (with restaurants faring worst) and 40% said they wouldn't do it again; even people who made money had staff problems due to high volume and, er, cheap tippers")

It is usually easier to modify working code than to write something from scratch, if my suspicion is right, I expect Google will launch its own Groupon-like service integrated into its other offerings eventually.

> It is usually easier to modify working code than to write something from scratch, if my suspicion is right, I expect Google will launch its own Groupon-like service integrated into its other offerings eventually.

https://www.google.com/offers

Simple, Google is worried Groupon theoretically could get a huge share of local advertising like they were with Yelp.

Google isn't infallible, they are mortal. I think most likely they were willing to overpay because they could afford it and are desperate to get into "social".

Also, Groupon is a ponzi scheme because they use new investor money to pay old investors--not because they don't have a moat, which they dont-- no patents, 8000 employees and how do you scale with that many employees, a list of merchants and user emails.

At best they end up looking more like Avon.

The new investor money was overtly premised on paying old investors. The new investors were buying the risk from the old investors, who had just been asked to turn down $6bn. I think you're oversimplifying a bit.

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