Gilt Groupe is rumored to be in the final stages to acquire daily deals service BuyWithMe. BuyWithMe laid off over half of their staff last week to attract potential buyers. Matrix Partners is an investor in BuyWithMe and Gilt Groupe. BuyWithMe is expected to be rolled into Gilt Groupe starting November 1st. BuyWithMe was considered to be the number three player in the daily deals market after Groupon and LivingSocial. BuyWithMe is expected to be rolled into Gilt City. [BetaBeat]

BuyWithMe has acquired NYC-focused social deals company Scoop St. Scoop St. members now receive BuyWithMe offers, and BuyWithMe’s New York site will include all Scoop St. offers. BuyWithMe is available in 13 US areas: Austin, Boston, Chicago, Dallas, Houston, LA, New York, Philadelphia, Phoenix, San Diego, San Francisco and Washington DC. [TechCrunch]

BuyWithMe is a daily deals service that is similar to Groupon and LivingSocial. BuyWithMe has recently acquired student rewards company Edhance. Edhance has one of the largest rewards program in the U.S. Edhance will help BuyWithMe provide merchants with customer return rates and ROI data that roots from the daily deals. Edhance has headquarters in Cambridge, Massachusetts. [MassHighTech]

Foursquare has found a way to turn their gigantic userbase into real profit, partnering with companies like LivingSocial and Gilt Group to market local deals within the app. The Wall Street Journal reports that Foursquare is also in talks with Groupon for a similar arrangement. The move sounds genius, if it’s done right. Wouldn’t it be nice to check into your hotel on Foursquare and see an ad for a Groupon for a nearby restaurant?

Google Inc. (NASDAQ:GOOG) is now searching for a Groupon clone to buy-out. Groupon recently turned down a $6 billion offer from Google. This rumor implies that Google is getting desperate to penetrate the local coupon shopping market. Google may even consider looking into the next largest players in the group coupon list: LivingSocial and BuyWithMe. BuyWithMe has not confirmed whether they are in discussions with Google, but BuyWithMe interim president David Wolfe said that he believes Google needs to enter the market as it is the only effective model so far in attracting smaller retailers. [NYPost]

BuyWithMe CEO Cheryl Rosner has stepped down from the company as the company struggles to compete with Groupon. Rosner is the former Expedia President and TicketsNow CEO/President. Rosner was hire das the BuyWithMe CEO in April at the same time as when Groupon was valued at $1.2 billion. BuyWithMe raised $16 million in funding this past July. Below is a chart of BuyWithMe.com’s traffic versus Groupon: