Google Offers expands as Groupon hits the IPO road

Search giant's daily-deals play adds more cities and partners

Google apparently isn't fooling around in its bid to compete with Groupon in the daily deals market.

The search giant announced on its blog Thursday that it is expanding Google Offers by partnering with 14 deals providers and rolling out its service into other cities.

You can read all the details here, but here's a snippet from the Google blog:

We’re delivering more amazing deals from a bunch of new categories including outdoor adventure sports, luxury experiences, family-friendly events, classes and more. We’re also introducing a personalization quiz to help you find just the deal you want, all in one place.

These additions to Google Offers are being announced, of course, as Groupon executives and underwriters hit the road to pitch potential large investors (individual and institutional) on the company's planned initial public offering, which has rightly been greeted with skepticism from analysts and the media.

Groupon last December spurned a $6 billion offer from Google because the company's braintrust felt it was insultingly low. Now the Chicago-based daily-deals site is going public, but the problems it has had with accounting procedures and slowing growth (among other things) has caused the company to pare back initial hopes of attaining a post-IPO value in excess of $20 billion.

By the way, if you want to read a good value analysis of Groupon, check out Henry Blodget's take over at Business Insider. The headline -- "I Wouldn't Touch Groupon's Stock At The IPO Price With A 50-Foot Pole" -- gives you a good idea of Blodget's thinking.

Here's his "money quote":

Groupon's growth rate is decelerating sharply, and this deceleration is likely to continue for at least several more quarters.

Based on my experience (15 or so years of following tech stocks), that last factor is very important. "Momentum" investors HATE deceleration. And momentum investors have a big impact on the prices at which stocks trade.

And Blodget's conclusion:

Right now, based on the information I have and the assumptions I've made above, I wouldn't even consider buying Groupon's stock unless it were trading below $5 billion, which is about half of the valuation that the company is seeking in its IPO.

If you like drilling down into numbers -- both firm and speculative -- it's a good read.

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