I’ve had an interesting few days trying to track down exactly what is and isn’t going on with Yahoo and Groupon.
One source earlier this week said that a $1.7 billion acquisition was all but done, but Groupon’s management team balked and killed the deal. That’s certainly juicy and consistent with Yahoo’s failure to acquire Yelp and Foursquare.
Another source close to Yahoo said much the same thing, but suggested the price was higher, well north of $2 billion. And yet another source said that Yahoo offered a price so high that Groupon had to take it seriously. But ultimately a deal never happened.
If discussions were taking place, they were clearly at way above $2 billion, and probably above $3 billion. Groupon was valued at $1.35 billion earlier this year. A sale in the $2 billion range would mean that Groupon sees a major problem in their business model. Otherwise, they’d be in it for the long haul.
On the other side, a source close to Groupon tells me that there haven’t been any serious acquisition discussions with Yahoo at all. But we actually think this is incorrect.
Also, we’ve checked with some of the other usual suspects who’d likely be bidding against Yahoo in a Groupon acquisition. They’ve not heard a thing.
We have confirmed that Groupon and Yahoo are working on a large distribution deal of some kind. A smaller deal is already in place, but something much bigger is coming in the next few weeks. Deals with eBay and Citysearch are probably also being signed.
But for now, no acquisition. Either because discussions never happened (unlikely) or because Groupon management balked at being part of Yahoo (most likely), or because something else disrupted the discussions.