The localized deal-of-the-day Web site reportedly to buy the Chicago-based business. As recently as late last week, word was that and Groupon were in advanced negotiations. Various reports even had Google offering as much as $6 billion for the 2-year-old company that has generated so much buzz.

So with this deal reportedly in the trash, there seem to be two options for , according to industry analysts. Google, with its deep pockets and hefty clout, either will take another run at acquiring Groupon, or it will develop its own Groupon-like service and eclipse what would then be its competitor.

"Groupon would have been a nice feature to add to of social network-like assets, but it's not mandatory that they have this Groupon," said Dan Olds, an analyst with The Gabriel Consulting Group. "In other words, there are plenty of ways to skin this particular cat, and Google has the reach and creativity to come up with a different route to connect customers to sellers in innovative ways."

There has been a lot of excited talk around Groupon, which helps businesses reach directly out to individual customers. Groupon is designed to e-mail users with information about what to do in their cities, along with bargains and sales offers.

Augie Ray, an analyst with research firm Forrester, said part of the problem with Google's attempt to buy Groupon may lie with the fledgling company's valuation.