The May Report: 11/30/2010: Kudos to Kara Swisher of Boom Town and AllthingsD: Google’s $5.3B plus a $700MM earnout to float Groupon’s boat with Lefkofsky, Keywell and Mason at the helm, but aren’t other local VCs and angels in Chicago being left behind at the docks in the biggest and one of the fastest exits for a start-up this town has seen? Have Pritzker, McCall, Dugan, Geras, HPA, Kirschner, Sandbox, i2A, etc. missed out?; Google stock price falls on the rumor

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TABLE OF CONTENTS

The Scoop section:

– Google stock price falls 3.62% on the rumor that firm will pay $6B for Groupon

[Editor's note: May here. First, kudos to Kara Swisher for some first rate reporting on this story which she broke initially, I believe, about two weeks ago. This morning, oddly enough, Ashley Gross of Chicago Public Radio, WBEZ, called and we talked for about 45 minutes and will talk soon again, I referred her to about 20 people including Rokop, Hoch, Lavengood and Happ, Rhodes and Syncuabor, Costolo, Domaracki and company, Sandbox, HPA, Excelerate, Sam Yagan, and many others in her search to answer the question: What has the effect of Groupon been on the start-up situation and culture in Chicago? Chuck Tanner had referred Ashley to me.I'm not sure who he is, but will find out. Also, Ashley has about another week and a half to work on this project. I did tell her that the uptick in Chicago start up activity pre-dates Groupon with firms like FeedBurner, also bought by Google and I pointed out to her that Dick Costolo is now the CEO of Twitter.

During the conversation, Ashley asked me an interesting question which hits a key issue: What other local investors are in on the Groupon deal? Thinking about that this morning, I realized that curiously there really aren't any. Groupon has money from its founders, NEA, the Russians, etc., but where are the locals? To paraphrase Warren Buffett from his interview with ABC on Sunday, the rising tide has raised the yachts, but the row boats are left behind. I did tell Ashley about Lightbank and some of the deals they have done with local firms, and other investors as well, but her question hit the nail on the head. Bob Geras needs a liquidity event badly. Wouldn't he be happier today if he had gotten in on Groupon?

Today, Google is at 561.04 down 3.62% at 1pm.

Google closed on Friday, November 26lth at $590
Google closed Monday, November 29th at $580
Google opened at %65 today, Tuesday, November 30
At 1pm today, it was at $561.04, down 3.62%

Let me get this out. BTW, happy 84th birthday to Harriet May. I found out today that she was born in Brooklyn, I believe Flat Bush. She shares the date with Winston Churchill and Mark Twain.]
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The Scoop section:
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Google stock price falls 3.62% on the rumor that firm will pay $6B for Groupon
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www.marketwatch.com/story/google-shares-fall-on-groupon-deal-reports-2010-11-30

Google shares fall on reports of Groupon bid
Search giant is reportedly offering $6 billion for online discount firm

By Dan Gallagher, MarketWatch

SAN FRANCISCO (MarketWatch) – Shares of Google Inc. slipped Tuesday morning on reports that the online search giant is offering to buy Groupon – a Web site geared toward discount shoppers – in a deal worth $6 billion.

That would be Google’s /quotes/comstock/15*!goog/quotes/nls/goog (GOOG 561.00, -21.11, -3.63%) largest acquisition by far, nearly twice the size of its $3.1 billion takeover of DoubleClick in 2007 and far more than the $1.65 billion it paid for YouTube the year before.

Google Edition Could Shake Up E-Book Market
Google is in the final stages of launching its long-awaited e-book retailing venture, Google Editions, a move that could shake up the digital book. WSJ reporter Amir Efrati joins Rex Crum to discuss.

Shares of Google were last down 2.8% to $565.50. The stock has fallen about 9% for the year to date.

Reports in the New York Times and the technology blog AllThingsD say Google is near a deal to acquire Groupon, a Chicago company that provides daily discount offers to its users. AllThingsD said Google has offered $5.3 billion for Groupon, with another $700 million to be based on hitting certain performance milestones.

AllThingsD, like MarketWatch, is owned by News Corp.

Rumors have circulated for the past two weeks that Google was interested in buying Groupon. Read previous story on Groupon rumors.

In a report Monday, Wedbush Morgan analysts said such a move would be good for Google, putting the company in a strong position to attract more local advertisers. The report was based on an earlier rumor that Google would pay only $2.5 billion for the site.

“Given its connections to millions of local businesses around the world through Google Places and Google AdWords, Google clearly has the ability to accelerate Groupon’s already torrid growth,” the analysts said in their report.

Dan Gallagher is MarketWatch’s technology editor, based in San Francisco.
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kara.allthingsd.com/20101129/googles-groupon-offer-5-3-billion-with-700-million-earnout/

Monday, November 29, 2010
Google’s Groupon Offer: $5.3 Billion, With $700 Million Earnout

Posted at 10:58 PM PT Watch the video

According to sources close to the situation, Google has offered $5.3 billion for Groupon, in what would be its largest acquisition yet, if completed.

Sources said the deal for the Chicago-based social buying site seems likely to be struck, even as early as tomorrow, although it certainly could fall apart right up to the end.

But, if done, it will move the search giant instantly to the top spot in local commerce online and give it huge troves of data about consumer buying habits and merchant information across the globe.
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