Rumors are flying that Google is about to acquire Groupon. What will happen to location-based and mobile marketing if that happens? Why is Coupon.com raking it in? And how is Yelp going to try and dominate check-in marketing? Online2Offline commerce is going crazy this week so we try and pick the winners and losers.

Rumors are swirling around Groupon this week, mostly about the the fact that Google may be on the verge of acquiring them for upwards of $3 Billion, but also about just how much money the social shopping company is currently making.  

If the acquisition rumors pan out then Google’s domination of the online eCommerce space is going to be even more pronounced. Look at the assets they now are able to bring to any situation: the leading video-distribution and advertising site, a totally dominant search engine, the best live mapping technology, perhaps the most popular location-aware mobile platform, one of the biggest affiliate marketing networks, and with Groupon, the biggest local-offers/daily-deals company. It’s hard to see who is ever going to be able to compete with Google just on the search engine component of that portfolio, let alone also integrate the rest of the elements.

And make no mistake, Groupon will be a huge asset. In the five months to August Groupon grew from 300 to 1,500 employees, and expanded from USA-only into 29 countries. It has been estimated that they are bringing in $50 -$100 Million a month. They may be the fastest growing company in history. So there’s no question that Groupon would be good for Google. Add in the fact that all these types of daily-deals companies rely a lot on PPC marketing to drive traffic, and the attraction of Google as an owner becomes even clearer.

For competitors, there are a couple of straws to cling to. First, Groupon has a lot of competitors springing up. That is going to affect its margins. Up until now the rumor has been that Groupon typically takes a 50% cut of the revenues generated by the offers it runs. That won’t be sustainable with 10 or 20 competitors calling on the same local or national advertisers. Secondly, Groupon doesn’t benefit from any network effects that bind customers into the service. They’re not really a social site, and so it’s always going to be easy for customers to switch to a competitor – this may be the reason why they’re looking for a buyer for the company: get a big payout for the investors before competitors start chipping away at the growth rates and margins.

Whatever the truth of the acquisition rumors, the whole space is going to be in flux over the next few months, which means there is money to be made.

In other Online2Offline commerce news, Coupons.com released data this week showing a 57% increase in the distribution of its digital coupons for the year. Coupons.com has a huge online digital coupon distribution network but is best known for their online printable coupon business and for the calendar year 2010 they will surpass $1 Billion in printed coupon savings. That’s an awful lot of cheap cereal and toothpaste.  

What Coupons.com does really well is use technology to provide performance-based marketing solutions to major brands and retailers. Whether it is online printable coupons, reloadable store loyalty cards or mobile shopping applications, they focus on their core mission and deliver on it in spades.

Simultaneously, Yelp has launched their new location-based offers program, Yelp Check-in Offers.  

This is basically Yelp’s big screw-you to Foursquare and Gowalla, and follows on from their introduction of business check-ins some 10 months ago. The new offer platform incorporates a timer that limits the life of the offer in order to create Groupon-like buzz and urgency. What is not yet clear is how Yelp will charge businesses for the service: upfront, or as a cut from from after-the-sale revenues like Groupon.

Location-based, mobile marketing is going to be massive in 2011 and it’s clear that Online2Offline commerce will drive most of that growth.  What are you doing to make sure you’re ready for the fight?