Daily deals website Groupon could be valued at as much as $25 billion in an initial public offering, Bloomberg reported on Thursday, citing two people with knowledge of the company's discussions with banks.
The multi-billion dollar valuation is the latest in a string of high valuations for hot Internet companies including Facebook and Twitter, and raises questions about which companies will ultimately survive.
Jeffrey Grau, a principal analyst with eMarketer, said Groupon might not be able to sustain a high valuation.
I see a number of challenges ahead. LivingSocial is really making a push to really compete with Groupon, Grau said.
In the short term the outlook is very bright. However, they are going to face a lot more competition.
Groupon's IPO might happen this year and would likely value Groupon at a minimum of $15 billion, the sources told Bloomberg.
Groupon declined to comment on the report.
Groupon founder and Chief Executive Andrew Mason told Reuters in January that the company was considering a public offering and was in talks with bankers, but had not yet made a decision about whether to proceed.
A source told Reuters in January that a Groupon offering would be meaningfully sized.
The two-year-old start-up rebuffed a $6 billion advance from Google Inc
(Reporting by Maria Aspan and Jennifer Saba; editing by John Wallace and Gerald E. McCormick)