Groupon talks point to $25B valuation
Come on, $25 billion for a site promoting Brazilian wax treatments and photography classes?
Now we're getting a better idea of why Groupon turned down a $6 billion offer from Google (GOOG) in December. The site is on fire. It has doubled its subscriber base in the past three months to 70 million users. Just a year ago, Groupon was valued at $1.3 billion.
Aren't we going overboard here? Does a daily-deals site really warrant anything close to a $25 billion consideration? One analyst told Bloomberg that this sector is as "hot as anything, and no one knows where it's going to tap out."
Groupon rang up $760 million in sales last year, but a good chunk of that went back to local merchants in the revenue-sharing system the company has devised.
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A fleet of new companies, such as Living Social, are trying to compete for the same business. Facebook has begun testing a daily-deals service in a few cities, and Google has its own ambitions.
Groupon's IPO would be one in a series of tech offerings expected in the next year. Business-networking site LinkedIn is expected to go public, as well as online games site Zynga, Internet radio darling Pandora and Web-calling company Skype, USA Today reports.
The tech industry is itching for a bonkers IPO, and Groupon is the front-runner in that race, New York Magazine reports. Groupon's $25 billion valuation would be slightly higher than what Google was valued at when it went public in 2004. "It's still hard for us to wrap our heads around the assumption that a company that had indexed the Internet and was getting to work on mapping the world around us is worth anywhere near as much as amusing copy and coupons at a local store," the magazine writes.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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