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No way Amazon is going to buy Groupon: Analyst

Wednesday, 28 Aug 2013 | 5:38 PM ET
Should Amazon buy Groupon?
Wednesday, 28 Aug 2013 | 2:24 PM ET
Groupon is building warehouses for its physical goods business, creating competition for Amazon. Should Amazon just buy Groupon? R.J. Hottovy of Morningstar offers insight.

Groupon is taking a cue from Amazon and developing a warehouse network in North America for its Goods business. While that's a step in the right direction, it likely won't be a game changer, said R.J. Hottovy, a senior retail analyst at Morningstar.

(Read more: Groupon weighs warehouse network for goods business: WSJ )

"It's a sensible move on Groupon's part to build out [Goods], but it's tough to ever see this becoming anything more than a niche business," Hottovy said. "Even the CEO said they're not going to distribute all products, so I don't think it's going to be much of a disruption."

Daniel Acker | Bloomberg | Getty Images

Amazon already dominates in products delivery, he added, which is another reason Groupon's having warehouses won't make too many waves.

"Amazon set the bar very high with their selection, low prices, delivery, speed and customer service," Hottovy said. "I just don't see it [Groupon] being a major threat."

(Read more: Groupon becoming a 'predominantly mobile marketplace': CEO)

Still, Goods, which sells a range of consumer products, has grown in North America. That has led some to speculate that the push to bring Groupon's delivery in-house could make the company a potential acquisition target for Amazon.

That's also most likely not going to happen, Hottovy said.

With its strong grip on the market, Amazon is already invested in companies similar to Groupon, including Living Social. And it has been promoting Amazon Local, which also specializes in daily deals, for the past few years.

"An acquisition of Groupon would be redundant at this point," Hottovy said. "I think they are going to have some difficulties evolving that business. I think that's going to be very difficult, especially when Amazon has a foothold in every part of the landscape and the Internet."

By CNBC's Cadie Thompson. Follow her on Twitter @CadieThompson.

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  • Matt Hunter is the senior technology editor at CNBC.com.

  • Cadie Thompson is a tech reporter for the Enterprise Team for CNBC.com.

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.

  • Jon Fortt is an on-air editor. He covers the companies, start-ups, and trends that are driving innovation in the industry.

  • Lipton is CNBC's technology correspondent, working from CNBC's Silicon Valley bureau.

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