Groupon refused to let Google buy it – so now Google has made its own Groupon. Can it succeed?

January 21, 2011

I suppose we shouldn’t be surprised.

It didn’t begin long ago; around early December of last year, rumours began churning that Google wouldn’t attempt to buy Groupon. Shortly after, it did, offering a staggering $6 billion—roughly double what many experts had anticipated. But Groupon has seen the $50-billion light of Facebook, and flatly refused the offer.

Enter Google Offers.

Mashable broke the story on Google Offers; the latest forthcoming group-buying business. Rumour it is not; Mashable received an email statement from the company that all but confirms its future existence:

Google is communicating with small businesses to enlist their support and participation in a test of a pre-paid offers/vouchers program. This initiative is part of an ongoing effort at Google to make new products, such as the recent Offer Ads beta, that connect businesses with customers in new ways. We do not have more details to share at this time, but will keep you posted.

It’s an exceptionally saturated market, of course. But in Groupon’s case, it was a pioneer of digital execution of the concept; therefore it was too big for any newcomers to try and compete with, which is why you hear very little about the 100 other copycats out there. (Not that they’re failing; LivingSocial is doing well on Amazon’s back. But none of them would exactly turn out $6 billion.) Google, however, is already much bigger than Groupon. And it has a lot of fans—precisely what group buying sites need to succeed.

Ben Parr from Mashable takes a different view, however:

After spurning Google’s offer, Groupon had to be expecting today’s news. We doubt Groupon would have rejected Google’s offer if it didn’t have a plan for competing with Google. While I admit that is my own hypothesis, [CEO Andrew] Mason has proven more than capable of predicting major technology and business trends. I think it’s a safe bet to say that Groupon is prepared for (and not scared of) Google’s entry in its market.

I personally believe that if anyone can take on Groupon in the collective buying power space, it would be Google. I certainly know I would subscribe to its daily deals.

2011 may just end up a turbulent time for the group buying business.

Screenshot credit: Mashable