Why Web Publishers Better Hope Google Doesn’t Acquire Groupon

The big chatter this Cyber Monday morning comes from Vator.tv who has found some details that Google has acquired Groupon for $2.5 billion. The notion that Google will acquire Groupon has been going on for a while now with Kara Swisher reporting on Google’s interest earlier this month.

If we look back to Google’s acquisition of FeedBurner in 2007, Google quickly killed one of the most awesome display advertising programs and replaced it with AdSense for RSS Feeds which frankly has been a big dud.

While Groupon and FeedBurner are completely different services, my fear is that if Google does acquire Groupon, the Groupon Adwords spend will be gone – replaced with “house” ads that pay close to nothing pushing the new service.

Earlier this year AdAge posted some internal Google documents that showed the biggest spenders on Google AdWords. Groupon competitor Living Social was listed as one of the top Google AdWords advertisers with a total spend of $2.29 million for June 2010. When was the last time you visited a website and didn’t get hit with a cupcake image ad for Groupon or a burger image ad for Living Social?

As the group buying category continues to grow, all of the companies in the space are spending mad money on Google AdWords. These ad buys flow (after Google’s cut) to web publishers. I also wonder what will happen to the local advertising space if these group buying sites begin to get acquired en masse.

Other forms of advertising that would most likely be terminated if Groupon is acquired by Google include cashback and CPA deals with a variety of the deal sites.

Selfishly, web publishers should hope that Groupon doesn’t sign the acquisition documents. For (at least) the short-term, it would mean a larger AdSense check.

And just to be clear, Groupon should take the money.