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Did 'Break Fee' Bust Google/Groupon Deal?

  • Ad Age, Friday, December 24, 2010 12:30 PM
Tech analyst and blogger Paul Kedrosky tells Ad Age that Groupon was, in fact, hoping to sell to Google, but it feared the deal would have been sidelined by antitrust regulations.

"Groupon wanted to sell, but in case the deal fell apart, they wanted to get paid anyway, and that's the purpose of a break fee," Kedrosky explains. "At the end of the day, since Google couldn't come up with a large enough break fee, it means there was a real likelihood that the deal could have fallen apart and they had something to worry about."

Meanwhile, despite the obvious success of Groupon -- and the potential reach of tech giants like Google and Facebook -- Kedrosky doesn't buy into the prospect of a single, truly scalable local advertising platform. "There's definitely a billion-dollar hyper-local ad market but the right way to see it is there's a $15,000 local ad market," he says. "There's a whole bunch of many, many small markets."

Also of note: Kedrosky's big on mobile, transactional, location-based offerings, and Gilt Groupe's Jetsetter in particular.

Read the whole story at Ad Age »

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