If these reports are true, than this will be the second time Google will have failed to go into local, with Yelp talks also falling through. And walking away from that amount of money is pretty incredible. However the situation could very well still be fluid and the companies could continue to flirt until Groupon either goes public or take perhaps even more money from investors.
This has been a very leaky negotiation, basically negotiating through the press, so this could just be Groupon’s way of playing hard ball through a strategic leak. Your move Google.
Update: We’ve heard from a third source that the deal is in fact off and that Groupon’s revenue run rate is now at $2 billion instead of the oft-quoted $500 million.