Groupon was Smart for Not Taking Google's Deal

According to the Chicago Tribune, Groupon decided to turn down Google's $5 billion offer. Although some people think it was a bad decision to turn down a $5 billion check, I agree with Groupon's decision of not selling out. And to owner Eric Lefkosky, holding out and going public with a start up is nothing new. He has already made a lot of money by taking two companies public rather than selling. In his eyes the company is worth more than $5 billion, and he has good reason for believing so.

One of the biggest advantages that the company has is its name itself. With the increasing popularity of "groupons," the company does not have to spend any money in improving its name recognition. This type of coupon has been named after the company, which gives them an edge over its competition. They already serve in 52 markets, while its main competitor only has 14. And although its easy for others to mimic there business model, several companies have had little to no success in taking market share from Groupon.

With that said, Groupon is still taking a great risk in not accepting the deal. The company could do a lot with the resources that Google has, and could accelerate its maturity process which could help them take out the competition. According to the Wall Street Journal, "Some financial analysts favored the deal, even at $6 billion, because it would allow Google to get a slice of a fast-growing market, and that Google could market the coupon product to its more than one million advertisers. It will be interesting to see how Groupon will turn out when it decides to go public.