Groupon Rebuffs Google's $6 Billion Offer, A Sign Of An Evolving Web
But it was not to be, as Google scared away yet another potential acquisition target. Lately, as with Yelp.com and Twitter before that, thriving businesses would rather walk away from piles of cash than hand over the reins to Old Man Google.
After a stretch in 2006 and 2007 when it bought YouTube for $1.65 billion and advertising firm Doubleclick for $3.1 billion, Google has found that its reputation for letting acquisitions languish (as with FourSquare predecessor Dodgeball) has caught up with it.
Potentially more important, Google has found that it has fallen out of touch with the next generation of internet innovators, Fortune writes:
"Google is increasingly feeling like less of a value add. In its quest to be open, it's stopped feeling like a smart filter that brings the most relevant parts of the web to users of its search, and more like the actual wild, woolly, untameable raw web itself."
The analysis continues: "Until it proves to the current generation of [Groupon founder] Andrew Masons that it understand social and the closed web -- not just as a nice bag on the side of their search engine, but as core to the future of the Internet -- it's going to have a hard time getting superstar startups to take their money, at any price."
A prime example of the reemergence of the closed web, also sometimes known as the "walled garden", is Facebook. As a place where users can operate within a controlled, simplified environment, Facebook represents a taming of the "wild web" Fortune describes.
Facebook has a lot more in common with Yelp, Twitter and Groupon than Google does, it turns out. The key difference is social trust. Whereas Google's search-based viewpoint considers all kinds of factors in delivering information and advertising, the new generation relies on interpersonal connections.
Groupon relies on the buying power of a large group of like-minded people, which at times resembles a community, to drive down the prices of goods and services.
This personalization of the Web's commerce is bad for Google, which has yet to figure out how to master social networking.
If the meteoric rise of companies like Groupon (which became a billion-dollar company in 18 months) is any indication, social relationships are becoming the foundation of the web's growth.
Google is so entrenched that it can afford to be slow on mastering the social element of the internet. But it will keep encountering companies that would rather go it alone than sell out to an acquirer that doesn't "get" what they're trying to do.
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