The Best Way for Google to Integrate Groupon: Keep It Separate

Dec. 1.10 | About: Alphabet Inc. (GOOG)

Google (NASDAQ:GOOG) has reportedly offered to buy Groupon for $6 billion, and Groupon's board is meeting today to accept discuss the offer.

So it seems like a done deal.

And that's great for Groupon. And it's possibly good for Google, for whom $6 billion of cash is basically couch change. But only if Google avoids screwing Groupon up.

And that's actually a tall challenge, given that Groupon is all about sales and marketing and improv-comedy writers, and Google is all about engineering.

One thing seems certain: If Google tries to Google-ize Groupon, the result will be a disaster.

(We're guessing here, but we suspect the vast majority of Groupon's 3,000 employees could not answer one of the 15 Google Interview Questions That Will Make You Feel Stupid, let alone all 15. And that's not because they're stupid. It's because they think differently than Google engineers and business consultants. And it's that different kind of thinking that has allowed Groupon to invent a massive new business out of thin air, just the way Google did ten years ago.)

Specifically, if the Google brains come charging in and try to "optimize" Groupon or some crap like that, the most talented of Groupon's 3,000 employees will flee and all Google will be left with is a gigantic sales force that no longer has any interest in selling anything.

So how should Google "integrate" Groupon?

The same way Amazon (NASDAQ:AMZN) has integrated Zappos.

Which is to say: Google shouldn't integrate Groupon at all.

Google should provide some back-end infrastructure support to lower Groupon's technology costs. And Google should obviously help Groupon "buy" millions of AdWords for free, thus removing one of Groupon's biggest costs. And Groupon's brass should fly out to the Googleplex once a quarter or so and tell their Google bosses how Groupon is doing.

But other than that, Groupon should remain a wholely-owned subsidiary, one with its own brand, plan, and management team, one that merely sends the cash it generates upstream to corporate HQ.

In other words, Groupon should become "a Google company," and the integration should go no further than that.

If Google "integrates" Groupon that way, this deal has a chance of being a home run, even with a $6 billion price tag. If Google tries to insert its brilliant Google brains into the Groupon mix, though, look out.

Disclosure: No positions

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