NEW YORK—It’s no secret that Internet search giant Google Inc. covets what Groupon has to offer.
Last December, Google bid a whopping $6 billion for startup Groupon Inc., the popular “deal-a-day” website that has created the social coupon market, and is a lucrative destination for local advertising. Groupon rejected that bid.
Today, Groupon is more determined than ever to go it alone. Last week, it hired Google veteran Margo Georgiadis to be its chief operating officer. Georgiadis had been the vice president of global sales operations at the Mountain View, Calif.-based company.
It’s the second major Google poach in the past two months—in February, Groupon hired Google’s mergers and acquisitions executive Jason Harinstein to head up corporate development.
This move is likely part of a bigger plan to hire more experienced executives ahead of its initial public offering, which Groupon is reportedly interested in. NY Times’ Dealbook predicted in January that the Chicago-based Groupon is targeting a valuation of $15 billion in the market.
Growing Social Coupon Market
Groupon is the industry leader in one of the Internet’s fastest-growing sectors: localized offers and social couponing.
Each day, consumers are offered a daily deal from a local merchant, promising big savings. The deals are usually unlocked when a set number of participants sign up for the deal.
Recognizing the promise of the industry, Amazon.com invested $175 million in LivingSocial in December 2010. Anyone who doubts the success of that venture need not look further than LivingSocial selling 1.4 million of $20 Amazon gift vouchers in January—at $10 per voucher.
After attracting $175 million from Amazon, LivingSocial also received $8 million from Lightspeed Venture Partners. LivingSocial also recently acquired Urban Escapes and now offers urban deals, campus deals, and escapes on its website.
Not to be left out, Google is preparing to launch its own local group buying service, dubbed Google Offers. The service is currently in beta testing in the Portland, Ore., market. According to Google, it plans to “partner with some of the best local businesses in your area to bring you great deals at 50 percent off or more.”
Google has said that the service will soon expand to San Francisco and New York.