Google to splash $2.5 billion on Groupon?

Google will buy discount website Groupon for $2.5 billion (1.6 billion), if the rumours around the acquisition prove to be true.

Chicago-based Groupon only set up shop two years ago and offers daily deals on the best things to do in cities across the globe.

Any Google move would come after months of speculation about a deal between the two firms, while Yahoo was also reportedly interested, according to Vator.tv, which said it had a "reliable" source on the agreement.

Earlier this month, Groupon announced a distribution partnership with Yahoo, through which deals will be integrated into Yahoo's new Local Offers programme.

Groupon has been expanding at a rapid pace since its inception in November 2008, both geographically and financially.

In May, the company announced its move into Europe through the acquisition of a similar service named Citydeal.

Groupon has also been valued at over $1.3 billion and has reportedly generated revenues surpassing $50 million a month.

A report from Forbes Magazine earlier this year said Groupon was the fastest growing web company ever outdoing the likes of Google itself, Ebay and Amazon in that respect.

If Google does spend $2.5 billion on Groupon, it will have splashed out more than it did on the hugely successful YouTube, which it bought in October 2006 for $1.65 billion.

Google told IT PRO it did not comment on rumour or speculation.