The social website, Groupon Inc (NASDAQ:GRPN) is currently trading around the levels that Google Inc (NASDAQ:GOOG) tried to acquire the company at. Right around November of 2010, Google offered to buyout Groupon for $5.3 billion, according to reports.  Interestingly enough, Groupon denied the takeover which would have been one of the largest acquisitions at that time.

No one knows why Groupon CEO, Andrew Mason turned down the potential takeover but some say it is because Mason didn’t want to turn over his young company yet or arrogance, according to some.  Regardless of what may or may not have been the reason to turn down the offer, Groupon is about to fall through the same area that Google wanted to buy it at, around $9.30.  Keep in mind that Groupon went public for $20 a share.

The question that begs is whether or not Google should try to repurchase Groupon since it is once again at similar levels?  No, here is why.

While a coupon site such as Groupon is right up Google’s alley, there are some issues that you must consider.  Groupon has a very small economic moat to work with.  The problem is that there are many coupon websites that you can use for free, so why would you pay a hefty premium to use Groupon?  Not to mention, Facebook Inc (NASDAQ:FB) is working on a similar platform.

Not to mention, the stock has been a total failure since it went public at $20 a share.  Combine that with past accounting troubles and you have a not so bright future.

While Google could make use of Groupon, it just seems as though it is too much work for an unknown amount of reward.  Not to mention, if they turned down $5.3 billion originally, what are they going to want now?  The original offer was too much anyways.

Social media, in general, is not a very appealing sector to me.  It seems as though all these companies have such high expectations and such high valuations that it essentially puts too much pressure on management and the stock.  Social media has certainly not been a hotspot, especially after Facebook’s blunder IPO.

The bottom line is that even though Groupon is trading at the same levels as when Google tried to buy it out, they would be wise to pass up the opportunity again.  Groupon has too much competition and issues that Google just does not need to deal with.

A Spokesperson for Google would not comment on the story.