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It is being widely reported this morning that Google is preparing to make a $6 billion bid to acquire Groupon, the online coupon start-up that, as the New York Times describes it, “offers deeply discounted coupons from local stores, restaurants and services. Deal-hungry buyers often mobilize their friends and family through Facebook and Twitter, which helps the Groupon concept spread.”

The bid includes $5.3 billion for the company, and $700 million in performance bonuses for top management. Groupon has been built on approximately $170 million in investment capital over the past two years. (If this deal goes through, it can be considered a fairly decent return on investment.)

The Times writes that “the viral aspect of Groupon’s business could give Google a much-needed path toward social networking. Google has been frustrated in its attempts to create a social network and it fears the growing power of Facebook’s advertising machine, which produces higher ad responses because friends in the network recommend products and services.”

And while some analysts believe the price is too high, others suggest that the price of not buying Groupon would be enormous ... because one of its competitors is almost certain to buy it, which will put Google at a competitive disadvantage.

It is all very eye-opening, because deals and deliberations like these reflect how the marketplace is changing, and how relationships between marketers and consumers could change down the road.

- Kevin Coupe
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