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Google buy of Groupon could see antitrust review
Reuters - Thursday, December 2
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By Nadia Damouni
NEW YORK - Google Inc could run into antitrust scrutiny that would make any acquisition of discount coupon provider Groupon a long, complex affair, a source and experts said.
The two companies remain in direct negotiations, sources said on Wednesday.
"The more Google acquires, the more antitrust issues they are opening themselves up to," said a source familiar with the situation, who requested anonymity because the talks are ongoing. "That has to be considered."
The review process in the United States will take a long time, said one head of media investment banking who is not involved in the discussions.
But one argument that Google could make is that the barriers to entry for a discount coupon company are low, given the 80 to 100 participants already in the market, said a sector banker who is not involved in the talks.
A possible deal will undoubtedly bring more vendors and customers to one place, but that banker said Google will be able to assert that although it is buying a big participant, the deal is not anticompetitive.
Groupon said it would not address any speculation about its business, an apparent reference to media reports on Tuesday that Google was close to buying it for $6 billion.
Google shares gained 1.6 percent to close at $564.35 on Wednesday.
Chicago-based Groupon separately said it was acquiring Ludic Labs, which develops local marketing services including Offer Foundry and Diddit. It also announced the opening of an office in downtown Palo Alto, California, and plans to expand its team there from 25 people to more than 100 in the next year.
Late on Tuesday, Groupon said it had acquired three "daily deal" websites -- uBuyiBuy, Beeconomic and Atlaspost -- to expand its reach across East and Southeast Asia. Atlaspost has more than 1.2 million users in Taiwan, Groupon said.
Groupon did not disclose terms of any of the transactions.
The company sends its members daily e-mails with details of discounts for 200 goods and services. The deals are activated only when a minimum number of people agree to make a purchase, giving Groupon the clout to negotiate steep group discounts on products and services.
The three Asian companies, active in Taiwan, Hong Kong and Singapore, will transition to the Groupon brand in a few months.
Groupon also launched Groupon Hong Kong, Groupon Singapore, Groupon Philippines and Groupon Taiwan on Wednesday.
"We see enormous potential in the Asian marketplace," President Rob Solomon said in a statement.
Groupon's global network has more than 33 million subscribers in 35 countries.
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