Billion Dollar Day & Google's Big Bet by Chris Trayhorn, Publisher of mThink Blue Book, December 1, 2010 Groupon’s value has increased by $3 billion in a week, CyberMonday broke the $1 billion-in-a-day mark and US mobile ad spend is forecast to exceed $2.9 billion within four years. The news of the death of America’s economy has clearly been exaggerated, certainly when it comes to online. The big question is whether the benefits of all this online activity are going to be felt outside of Google, Apple, Facebook and the mega-networks, or will they manage to carve it up between themselves? Judging by the Groupon deal, Google wants to take it all. Last week we brought you the hot rumor that Google was seeking to buy Groupon – you heard it here first. And now we expect that within 24 hours there will be agreement on a $6 billion acquisition by Google of the fast-growing social buying website. This will be a massive move by Google who have struggled so far to make much of a mark in the local advertising space, despite the strength of their mapping and location technologies. But now they’re getting very serious. By a stroke of good fortune, the news coincides with Groupon’s launch of their Groupon 2 Platform which may just revolutionize the sector by adding “Deal Feed” which sends a personalized stream of new deals to users, and “Groupon Stores” which allow marchants to set up stores and offer customized deals to Groupon’s user base on a self-serve basis for only 10% commission. So, will the Groupon deal work for Google? Probably, just because they are showing such determination to dominate local search and advertising. But there are real problems ahead. First is that much of Groupon’s early success has been driven by first-mover advantage which is now on the wane – hence their rush to tie up a deal before the competition takes a bite out of their growth rate. The second potential issue is that many of Groupon’s biggest deals have been based on users promoting them to their networks of friends and social contacts. How? On Facebook of course. And Facebook has just launched Facebook Deals, precisely aimed at this market opportunity. But notwithstanding Facebook and other competitors, a $6 billion bet on local advertising by Google is a real statement of intent, and it’s very definitely another nail in the coffin of local newspapers. Filed under: Revenue About the Author Chris Trayhorn, Publisher of mThink Blue Book Chris Trayhorn is the Chairman of the Performance Marketing Industry Blue Ribbon Panel and the CEO of mThink.com, a leading online and content marketing agency. He has founded four successful marketing companies in London and San Francisco in the last 15 years, and is currently the founder and publisher of Revenue+Performance magazine, the magazine of the performance marketing industry since 2002.