Simple, Google is worried Groupon theoretically could get a huge share of local advertising like they were with Yelp.
Google isn't infallible, they are mortal. I think most likely they were willing to overpay because they could afford it and are desperate to get into "social".
Also, Groupon is a ponzi scheme because they use new investor money to pay old investors--not because they don't have a moat, which they dont-- no patents, 8000 employees and how do you scale with that many employees, a list of merchants and user emails.
The new investor money was overtly premised on paying old investors. The new investors were buying the risk from the old investors, who had just been asked to turn down $6bn. I think you're oversimplifying a bit.
Google isn't infallible, they are mortal. I think most likely they were willing to overpay because they could afford it and are desperate to get into "social".
Also, Groupon is a ponzi scheme because they use new investor money to pay old investors--not because they don't have a moat, which they dont-- no patents, 8000 employees and how do you scale with that many employees, a list of merchants and user emails.
At best they end up looking more like Avon.