Groupon Makes $2 Billion Annually

You should have heard by now. Groupon has rejected Google’s offer. It has decided it is best to stay independent.

One of the reasons (as I believe) is because it is able to generate $2 billion in annual revenue independently, way more than the speculated $500 million to $600 million. It makes Google’s $6 billion offer insignificant and the team knows Groupon is still far from reaching its fullest potential. After all, the social group-buying start-up is just 2-year-old.

All Things Digital was first to report Groupon’s $2 billion annual revenue figure.

Groupon makes money by charging 50 percent of the revenue paid out to local merchants. Its attractive business model is the result of successful direct sales combined with the social network effect. Groupon was profitable in its seventh month. Even Facebook and Twitter have not been able to achieve such revenue growth in such short time.

Google’s $6 billion offer looked irresistible and the media, including us, created the impression that the deal looked certain. I first started to doubt the Google-Groupon deal when Groupon announced its acquisitions in Asia. The timing isn’t right to announce acquisition deals when Groupon itself could be acquired by Google.

So there, the deal didn’t happen. We will see how Groupon would go on to dominate the local deals market. It also makes me wonder what will Google do next.