I think there is a good possibility.  Google buys up tons of startups, though it doesn't really do much with some of them, at heart Google is an advertising company.  I think Groupon would fit really well with an upcoming social media venture that has been talked about. 

Besides, the largest customer database in the world plus group buying will almost always equal success.  Even if they lose, at that magnitude, they win!

Groupoogle?

As we all now know, the deal didn't go through, and I think it was a good move by Groupon. People balked at the $6B offer as too big, but if it's only 3X forward earnings, that's tiny. Google/Groupon would have been a huge culture clash, too. The comapnies are vastly different, and Groupon would have been negatively impacted by Google's imposition. Groupon made the right move as the fastest growing company on the planet. 

I agree with you Michael. Groupon had already marked history being the fastest growing company, now they marked history by saying no to Google for pocket change... Isn't the web kinda fun?

VERY smart move by Groupon.  But, a big decision because of Google's popularity.  The web is SO fun!

"Google's Groupon Bid Rejected" BIG mistake in my opinion... Groupon is getting way ahead of themselves.

My 2011 prediction... Goggle buys Twitter!

@Ted I'm going to agree with a "but," look at Facebook. Zuck's had how many chances to sell FB? You can't deny that Groupon has set a trend. Perhaps trying to stay on top of the wave could pay off. 

And if Google doesn't buy Twitter, I'd be quite surprised. Who knows, maybe Twitter will try to stay independent though. As a publishing tool, it's clearly becoming more active than Digg or Reddit. 

Twitter is incredibly concerned, as they should be, about how to sustain and monetize what they have. Google is incredibly worried about Facebook and how to penetrate and participate in Social Media/Marketing. Solves a critical problem for both.

As far as comparing Groupon to Facebook, I think the projectory of their growth is where it ends. Facebook competitors have many more barriers to entry than competitors to Groupon, and they control the hearts and minds of their members... Groupon exists only as long as they can provide such unsustainable discounts. With Google... their value of their local search and local relationships/workforce came in to play and made them much more valuable than as a stand-alone. IMHO :-)

@Ted How many Internet companies started without a profit generation model?  Google is perhaps one of the bigger examples of this in practice.  I agree that Twitter needs to get its rear in gear to monetize, so perhaps Google+Twitter=success.  I have to remind myself that most of the net (read: those outside of the Twittersphere) view Twitter as a joke, and a bad one at that.  

Re: Groupon staying on top... Google's foray into eCommerce has always been a good idea waiting to happen IMO.  Perhaps Groupon is the missing link, and I'll admit the space allows for more competition, but in the end the majority will go where the users are.  If Groupon can establish a solid base (check), good deals (check) and get the word out effectively, they can last for as long as needed.  Let's not forget the ability to adapt.  I don't know that we've seen what Groupon can do long term yet.  Perhaps they have a few tricks up their sleeve (a partnership with something like Shwowp would be a real plus, don't you think?)

That being said, I doubt Twitter or Groupon will stay their own entities for long.  

I agree Most in the marketing community (outside the social media world) misunderstand Twitter due to a lack of understanding of how Twitter works and what is has become …when used wisely, it is not a broadcast tool or a standalone tool for marketing, it’s an enhancement to your marketing strategy and an extremely valuable networking, experimenting and seeding tool.  While it allows you to provide a broadcast-like tweet to all your followers, most will never see a single tweet and the real value is that it also allows you leverage the social graph of your followers, and to interact directly with one person in plain sight of thousands of people and allows them to pass along to others in their network.  Think about how much we learn about someone by watching their interactions with others, and you can understand how this feature of Twitter quickly creates (or destroys!) trust throughout your social network. But I am sure I am preaching to the choir here. 

I am not saying that Groupon will not survive, and they certainly have a business model, although their sales for the year seem to be grossly overstated in many circles. I simply believe passing up what was offered by Google showed tremendous hubris and that I believe they will come to regret the decision... even if they never voice that regret or remain successful. Like Gilt Groupe they rely on tremendous discounts which garner large audiences very quickly but are difficult, at best, to maintain. I think Google, beyond the ridiculous sum they were willing to pay, offered incredible synergies with regard to audience, local advertising (which in essence is what Groupon offers) and commerce. 

So I guess the new question is, who would you sell to if you were Groupon?

Well, well, well, you all seem to have covered this subject almost entirely.  Who would Groupon sell too?  Richard asks.  

Facebook's worth is now bigger than eBays.  And that makes it the third-largest U.S. Internet business.  I have no idea of FB's world status as a company, but of course, they are number one in social media, for whatever that might be worth.

So what would happen if FB bought Groupon?  (or vice versa)  Could they afford to offer more than Google has already put on the table?  (probably not, who could?) Or what if FB and Groupon merged?  

What would that look like?  Would that be Face-On, like that dumb commercial (head-on) on TV?

My thoughts exactly.  If I were Groupon, I'd have taken 6 bill from Facebook in a minute.  the platform seems already better designed for viral distribution, database building and sales potential. 

The problem is that Facebook would risk killing its own sales game by adding Groupon.  Sure, they'd make a cut off the top, but that's hardly worth losing the ad revenue they must bring in on FB ads. 

The more I think about it, Ted is right, Groupon's problem is sustainability and worth.  The group buying concept is its own worst enemy, it benefits companies willing to use it, but no one wants to straight out license it because it's not worth the risk.  Like licensing content to Netflix. 

And remember... the heart of Groupon's business model for their clients is not direct profitable commerce (it is only profitable upfront for Groupon). The business proposition that Groupon offers it's clients is lead generation. 

A very, very small percentage of Groupon clients make money when they generate all those sales. The business model here is aggressive acquisition through an engine that generates a huge amount of "hot" leads with credit cards ready. The challenge is to convert a workable percentage of those 'lost leader" buyers into profitable customers and have a metric that covers the upfront investment. 

There is a reason that the majority of their customers are small, local businesses. They do not have the upfront capital necessary to use more traditional acquisition models, and more importantly they are less sophisticated in the modeling abilities used to determine life-time value of a customer.... especially a customer acquired through aggressive discounting.