(
)
Google, whose $6 billion buyout offer was spurned by online coupon site Groupon, is in talks with much smaller rivals of the two-year-old firm, a source close to the situation told The Post.
The deal talks show that the search giant is intent on jumping into the fast-growing local coupon market through acquisitions and not through organic growth.
There was some thought that after Groupon this month rejected Google’s offer that the Mountain View, Calif., company would build its own coupon service.
Groupon has an 80 percent coupon market share and claims to have $1 billion in annual revenue — making buying its nearest competitors a humbling proposition.
LivingSocial, with a $1 billion valuation, is the second-largest coupon site. New York’s BuyWithMe, the third- or fourth-biggest player in the space, may also be on Google’s short list, though it has only $20 million in revenue.
BuyWithMe interim President David Wolfe, who declined to comment on whether he was speaking to Google. However, he did say that he believes Google needs to enter the coupon advertising market. It is the only effective model so far in attracting smaller retailers, Wolfe said.
BuyWithMe has New York area subscribers waiting to sign up for specials on restaurants, saunas and plays. If a certain pre-set number are interested, the merchant offers the coupon. Subscribers send payments for the discounted goods or services offered directly to BuyWithMe, which then sends them a voucher. BuyWithMe and the merchant then split the revenue.
Wolfe said the typical customer is between their late twenties and early thirties, and over 65 percent make more than $75,000 a year. Three-quarters of the New York area subscribers are women, he said.
“We are not comparable in size with Groupon in New York,” Wolfe said. Groupon has 900,000 New York area subscribers. “However, we believe we will be at the end of the first quarter.”
Wolfe said his customers often subscribed to both sites.
BuyWithMe is now in 12 markets, compared to 300 for Groupon.
Google, by buying a Groupon rival, could, through its reach, quickly expand into new markets, just as it was planning to do with Groupon.
Google, if it bought BuyWithMe, would have little trouble keeping an eye on its operations. This month it paid $1.8 billion for the 111 Eighth Ave. building in Chelsea, and BuyWithMe and its 60 or so workers are at 345 Hudson St.
Eschewing organic growth, Google may be thinking back to 2006, when it missed a chance to buy Facebook and since has struggled to launch its own social networking site.
Groupon, meanwhile, is moving forward. Yesterday, it announced that it hired Jason Child, a former Amazon vice-president of finance, as its chief financial officer. Analysts believe this signals it is ready to list its shares.
Google did not return calls. jkosman@nypost.com