Groupon UK Head Explains Why Google Is In Acquisition Talks

Posted Nov 26, 2010

Groupon UK Managing Director Chris Muhr did an interview with the Telegraph UK about why companies like Yahoo! and Google is in talks with Groupon about an acquisition. Groupon UK does business as a company called MyCityDeal. Earlier this month, it was revealed that Groupon was in early talks with Google Inc. (NASDAQ:GOOG) for an acquisition. Groupon would be a good fit for local business results that is generated by search engines.

?I think the main reason is that we have something that Google does not have and no one else has and that we have really tapped a new market,? said Muhr in the interview. ?It seems to me if you tap a new market the opportunities seem to be endless.?

Muhr added: ?Think about Google AdWords … if they had local business for example. Type in a keyword in Google, say ?bar?. You find a bar in your area. Google then puts up this kind of bubble box that says this is the business and here is the address. But that is it. It does not have direct contact with the business. The business does not come back and say I want to attract customers via that search. Most of the time the customer does not convert from there into an actual customer.”

Another reason why Google is interested in Groupon is because of their high profit margins. Groupon charges retailers and partners 50% of each voucher bought.

[Telegraph UK]