Is it Cool to Reject Google?

Before you go, we thought you'd like these...
Before you go close icon

This Wednesday at 12:45 p.m. ET/9:45 a.m. PT, The Motley Fool's top analysts will be hosting a live blog breaking down what Apple's iPad 3 press conference means for investors. The best part? They'll also be taking any questions you have about the tablet and Apple as an investment. Make sure toset a reminderto come back to Fool.com this Wednesday for all your iPad 3 news and analysis!

It must be fun to snub one of the most important companies in cyberspace. Is spurning advances and overtures from Google (NAS: GOOG) the cool thing to do nowadays? I can see Adam Sandler now, a la Billy Madison, telling a congregation of Internet startups with lofty aspirations, "You ain't cool unless you reject a multi-million or multi-billion dollar acquisition offer from Big G."

With shares of review aggregator Yelp (NYS: YELP) now exchanging hands in public after the company turned down a buyout offer from the search giant over two years ago, how has that decision panned out for the little guy?

The original bid from December 2009 was allegedly in the ballpark of $500 million or so, but CEO Jeremy Stoppleman decided to remain independent. Google then moved on and ended up acquiring Zagat late last year, as another way to play in reviews and ratings, albeit more specialized in restaurants than Yelp's free-for-all.

Yelp's IPO was priced at $15, which valued the company at around $900 million, factoring in the roughly 60 million shares outstanding. The opening pop at $22 pegged its value at over $1.3 billion, and the first day's high of $26 brought its capitalization to nearly $1.6 billion. Even the pullback over the past couple of days after the fading of the honeymoon glow, has brought shares to around $20 and a $1.2 billion valuation. Not too shabby, relative to that initial half-billion offer from Google.

Overhyped darling Groupon (NAS: GRPN) would be an ideal role model for rejecting Big G. The search king famously offered upwards of $6 billion for the daily dealer, roughly a year after Yelp broke its multi-colored heart. When the company went public in November, it was sporting a $13 billion valuation at its $20 offer price. Its opening pop saw shares reach as high as $31.14 and a nearly $20 billion valuation. Shares now sit near $18 and an $11.5 billion market cap. Again: not too bad.

In these two cases, going it alone has resulted in reaching at least twice the valuations that Google offered the smaller companies. Looks like saying no to Big G is all the rage nowadays.

None of the companies mentioned here happen to be The Motley Fool's Top Stock of 2012. That enviable title is reserved for one small retailer that's tapping into explosive growth in emerging markets south of the border. Get the free report now.

At the time this article was published Fool contributorEvan Niuholds no position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool owns shares of Google.Motley Fool newsletter serviceshave recommended buying shares of Google. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners