Groupon Inc., a Chicago-based Internet-coupon service with more than 35 million users, walked away from an acquisition offer from Google yesterday, according to a person with knowledge of the matter.
The proposed acquisition fell through amid hesitation by Groupon’s founding team, said the person, who requested anonymity because the talks are private. The startup will decide next year whether to sell shares in an initial public offering instead, the person said.
The discussions could resume if both sides overcome their differences. Google had offered $6 billion, including incentives that would be paid to the Groupon’s managers if performance targets were met, people familiar with the matter had said this week.
Groupon would have helped its new owner expand in the $133 billion U.S. local-ad market and lessen its reliance on Internet-search advertising. “Clearly Google wants to get into the local space and Groupon was one way,” said Aaron Kessler, an analyst at ThinkEquity in San Francisco, who has a “buy” rating on Google and doesn’t own it. “I don’t think from a Google perspective that if they miss out, that there’s not other ways to get into local.”