In a deal worth $2.5 billion Google is rumored to have acquired the collective daily deal provider Groupon, beating Yahoo, to capture the hottest company on the web.

Vator.TV reported that an unknown insider has confirmed the acquisition.

Groupon uses collective buying principles to offer daily deals on the local goods, services and cultural events. It acts a mediator between buyers and sellers. It currently scales 230 markets around the globe and has 13 million subscribers. The site was launched in 2008 and reports $50 million in revenues a month.

In April Groupon received $135 million in investment from DST, an Internet investment company and during the same time the company was reported to be valued at around $1.35 billion.

Groupon has itself been on a buying spree having acquired companies like Mob.ly a mobile and online recommendation service and German startup Citydeal in May. It also acquired a Chilean deal site ClanDescuento in June.

Groupon was also targeted by Yahoo in the earlier part of the year, as reports suggested that Yahoo had pitched more than $2 billion for the company in October. Yahoo has been aspiring to acquire companies to jumpstart its dwindling business which included failed attempts to acquire companies like Yelp, a local reviews site and Foursquare. In fact TechCrunch had reported that Google had almost settled a deal with Yelp but Yahoo's counter offer killed the deal.

Groupon's buy can compliment Google's Place Search which clusters search results around a location and also its Product Search feature which it recently updated with a feature that lists local stores where products are in-stock. For Groupon coming into Google's fold would protect it from competition from other similar sites like LivingSocial, Gilt City, BuyWithMe and Tippr.

It was earlier reported that eBay was also targeting Groupon.

Google inc Ma Google Google inc