Google Seeks Out Groupon's Competitors

It was no secret that Google had an eye on Groupon, the deal-of-the-day site that exploded in popularity since its release at the end of 2008. However, Groupon stood its ground against the search engine giant, turning down a six billion dollar offer to buy the company. Now, rejected and perhaps a little depressed, Google is on the rebound, searching for a Groupon look-alike to add to their company.

According to the New York Post, Google has been speaking with Groupon’s competitors. Though exactly which groups are on the list is uncertain, LivingSocial and BuyWithMe (the second and third largest companies in the industry) are anticipated as companies in Google’s sights. However, neither of these groups have nearly the size or influence of Groupon — a company that has about eighty percent of the market share in this industry.

LivingSocial has about a third the subscriber base of Groupon, but that still puts them at a healthy ten million total users. They function in 120 markets currently, contrasted to Groupon’s 300. LivingSocial representatives have neither confirmed nor denied being in talks with Google.

BuyWithMe comes in at a distant third in the industry. The company has focused its efforts on New York, but has also expanded to other markets (twelve in total). Even then, interim President David Wolfe stated that they won’t be matching Groupon in New York until “the end of the first quarter” in 2011. He declined to comment on whether BuyWithMe was in discussions with Google. Overall, BuyWithMe has only about five percent the current total revenue of Groupon.

By entering into talks with these Grouponesque companies, Google makes it clear that they will be focusing on acquisitions to step into the coupon market, rather than trying to build their own service as some analysts expected they would.