- Associated Press - Tuesday, November 30, 2010

NEW YORK (AP) - Google Inc. may be close to buying online discount service Groupon in a deal worth as much as $6 billion in what would be the search company’s largest acquisition ever, according to published reports.

The talks were reported by the technology blog All Things D and by The New York Times, which cited unnamed sources with knowledge of the matter.

Google and Groupon had no comment Tuesday.

The size of the deal would put it well above Google’s largest acquisition to date, its 2008 purchase of DoubleClick for $3.2 billon.

Groupon, a 2-year-old startup based in Chicago, offers daily local bargains ranging from yoga classes to discounts from national retailers such as Gap and Nordstrom Rack. Buying Groupon would give Google an increasingly popular outlet for local merchants that hope to lure in more prospective customers. That’s a lucrative space that Facebook entered recently with its Deals service. Google and Facebook are increasingly competing for online eyeballs and the ad dollars that follow them.

Groupon hasn’t disclosed its finances, but industry analysts estimate the company’s revenue this year will surpass $500 million, and the company has said it is profitable. The privately company has raised about $165 million in venture capital to get off the ground from investors including Digital Sky Technologies, which also holds a stake in Facebook and recently changed its name to Mail.ru Group.

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