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, north of $2 billion.
None of it adds up though. 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.
And in fact the information from these two separate sources is probably incorrect. A source close to Groupon tells me that there haven’t been any serious acquisition discussions with Yahoo at all, and for Groupon to even consider an acquisition would require $3.5 billion or more. Clearly, Yahoo would have a lot of trouble completing an acquisition of that size.
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 (most likely) or because Groupon management balked at being part of Yahoo.