The price tag continues to climb for Groupon, and Google (Nasdaq: GOOG) isn't flinching.

Several reports indicate that the social coupon website is mulling over a sweetened buyout bid from the world's leading search engine. Google is apparently offering $5.3 billion, with up to $700 million more in performance incentives down the line.

This kind of premium for a company that wasn't even around a couple of years ago should clear out the pool of potential bidders. Shelling out $6 billion is too rich for Yahoo!'s (Nasdaq: YHOO) blood. Microsoft (Nasdaq: MSFT) has the greenery, but also the sanity to avoid a bidding war with Big G.

It's Google or bust for Groupon at this price, unless it thinks it can hold out for more by going public.

The Groupon model is an easy one to replicate, and the buoyant valuation is encouraging other companies to dive in. Shares of OpenTable (Nasdaq: OPEN) and Travelzoo (Nasdaq: TZOO) have roughly doubled since introducing Groupon-esque initiatives this summer.

It would be easy for Google to launch its own Groupon clone, the way AOL (NYSE: AOL) is transforming its domain into a daily deals site.

Offering steeply discounted flash sales on goods and services at local restaurants, spas, hotels, and leisure experiences isn't very complicated. Yahoo!, Google, Microsoft, and AOL can't go wrong by introducing localized deals into their active email platforms, which have been historically tricky to monetize.

In short, Groupon killers are everywhere. But until the light bulbs begin going off, Google feels that its best play is to overpay for the undisputed leader.

In Google's defense, it's not as if that money is doing shareholders any favor collecting measly interest on the dot-com juggernaut's balance sheet. The way antitrust regulators -- particularly in Europe -- are treating Google these days, it's not as if the company will be able to get away with too many 10-figure buyouts in the future. It may as well go out blazing with the mother of all shopping sprees, while it still can.

Perhaps more importantly, Groupon represents the biggest risk to Google's future outside of Facebook. Just as folks on Facebook will continue to rely on their growing pool of "friends" for getting suggestions and referrals that used to be solicited on Google's search bar, Groupon will make local search less relevant. You don't need to track down new restaurant openings on Google -- or Yelp -- when you already paid $25 for a $50 food voucher at an eatery near you through Groupon.

You'll still lean on Google the next time you need to settle an argument on who was the 2007 Super Bowl MVP or want to catch a Ren & Stimpy clip, but that's not as juicy to monetize as the person who chose to smoke out a new dentist by asking friends on Facebook or the person ready to be pampered by a spa deal unearthed this morning on Groupon.

Google's $6 billion is a modest insurance policy for a company with a $180 billion market cap? As long as Groupon can earn more than the interest Google is currently generating on that money, it would be an accretive bonus.  

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