Google rumoured to buy Groupon for $2.5 billion

Google has bought coupon and discounts website Groupon for in the region of $2.5 billion, according to reports from people close to the deal.

The deal has yet to be confirmed, but it follows a failed acquisition attempt by Yahoo earlier this year, which was rumoured to be between $2 billion and $4 billion.

The website was said to be worth roughly $1.3 billion earlier in 2010, but it's not clear why it would sell to Google for potentially less than Yahoo was offering. It also has a revenue of $50 million per month.

There has been other speculation in the past that companies like eBay were interested in buying Groupon, but nothing came from that.

Groupon effectively works like a massive advertising network, with discounts enticing people to visit affiliate websites. It has around 20 million subscribers in 29 countries, making it a very big audience for Google to work with. It could simply slap on some of its own ads to generate more revenue or incorporate the service into its wider network.