Groupon recently turned down Google’s $6 billion offer for a takeover, with CEO Mathew Mason citing concerns over employee morale as well as alienation of clients as reasons behind the move. Soon after the offer being turned down, speculation is already rife about Google developing its own coupon service company but recent activities have made it clear that a coupon company search is still on for Google.
Google may have a hard time finding an alternative to Groupon though. Groupon, with 80% coupon market share and annual revenue for 2010 close to $1 billion is the largest among coupon sites by a huge margin. Groupon also has extensive reach with 33 million subscribers. It has a presence in 35 countries. Living Social, Groupon’s closest competitor and second largest coupon website is valued at $1 billion, followed by BuyWithMe coming at third place with annual revenue of $20 million. Both LivingSocial and BuyWithMe are options that Google might look into after Groupon rejection.
Coupon sites serve as a great way of internet marketing and promotion for small as well as medium sized businesses and Groupon has an excellent working relationship with many such businesses. But it may have to face some tough competition in the near future with companies like Google and Amazon trying to enter the coupon space. Amazon recently invested in coupon site LivingSocial in an anticipatory move to tackle Google’s takeover of a coupon company. What Google’s next plan of action will be remains to be seen.