With Google and Groupon engaged in acquisition talks, the search giant's investors are expressing concerns about the proposed purchase price (north of $5 billion, last we checked), as well as the
long-term viability of social deals. "Google's investors ... seemed focused on Groupon's valuation, which was estimated at $1.4 billion during its last fund-raising round in April," reports
The New York Times. "Google's bid carries a fourfold premium to that." As such, "On Tuesday, some Google
investors wondered if the company was paying too steep a price." As a result, shares in Google fell 4.5%, to $555.71. In a client note, Forrester analyst Sucharita Mulpuru wrote: "A
multibillion-dollar valuation for a company that is in a business with virtually no barriers to entry and is younger than my toddler is absurd." Yet, according to Search Engine Land's Danny Sullivan,
the question analysts and investors should be asking is: "What's the price of not buying it?" In other words, as The Times notes, Sullivan believes that Groupon could do far greater damage to Google
in a competitor's hands.
Read the whole story at The New York Times »
