Andrew Mason, founder and CEO of Groupon, stunned the business world last week with his rejection of a $6 billion bid by Google. Citing concerns with the strategic direction of the company under Google, the 30-year-old founder walked away from what would be the search giant's most expensive acquisition to date. At the time of his refusal, most business observers felt that Google, not Groupon, was taking the bigger risk by attempting the deal. After all, the daily coupon site is only two-years-old and competes in an industry rife with competition (e.g. Living Social, BuyWithMe). So was Mason crazy to turn down $6 billion?

  • This Could Be an Epic Mistake  "I'm speechless, which trust me, doesn't happen very often," writes Eric Savitz at Forbes back on Friday upon first learning of the deal: "What's amazing here is that most of the chatter here in the Valley has been about whether Google would be making a mistake spending that much for a young company in a sector that’s growing rapidly, but which has many competitors and low barriers to entry. Instead, it turns out to be Groupon that hesitated." He adds:
I can't help thinking of Yahoo turning down Microsoft's bid at more than twice the current price. ... While I have no idea if Groupon is making the right move…it certainly is a startling display of self-confidence. Stay tuned to this one.
  • Groupon Is Taking a Huge Risk Here, writes Frank Reed at Marketing Pilgrim Monday:
Groupon's current scale and its sales force can be hard to replicate but these could also be their Achilles' heel. Many a company has used a hard driving sales force to sell something before the competition gets in but then was spurned by its 'customers' because of those very same hard selling tactics.

Jut thinking out loud here but I have to believe that passing on the money from Google at this point in time (just two short years into the business) has a better than 50/50 chance to be a big regret by the Groupon management in the rear view mirror.

  • Groupon Has Room to Grow Independently  "Groupon just acquired three Asia-Pacific companies that give it presence in four new markets and is set to introduce free e-stores for merchants and personalized deal feeds for users," writes Gavin Dunaway at Adotas. "While competition may be steepening in North America, the daily discounter appears to still be on the incline. Our Adotas poll on the proposed acquisition had a majority of readers encouraging Groupon not to sell because it still had room to grow."
  • I Can't Decide If This Was a Good Decision, concedes Erick Schonfeld at TechCrunch:

The key to this business ... is who controls the inventory of deals. Groupon generates these deals through its large local salesforce, distribution partnerships with other sites, and now also by letting businesses create their own self-serve deals. The more inventory of deals it can control and generate, the more ways it can figure out how to distribute these deals. (Imagine a future local ad network for mobile apps filled with Groupon offers, as just one example).

Of course, Google can introduce its own daily deal ad units, and hire a few thousand local sales people to drum up the deals, or just make it all self-serve--probably for a lot less than $6 billion. But it would take time, and Google might not get it right.