Groupon is being accused of running "false and misleading business and advertising acts" and running "bait and switch" ads on Google.com, according to a lawsuit filed by a bus tour company in San Francisco.

In the complaint, which was filed in a San Francisco district court, San Francisco Comprehensive Tours argues that Groupon has found a way to unlawfully manipulate Google's AdWords advertising system that pairs text ads from companies with related search results on Google.com.

From the lawsuit:

Beginning in about September of 2010, Plaintiff (San Francisco Comprehensive Tours) observed that the cost of its click-throughs began to skyrocket, and its ranking in the purchased placement area for searches including the terms "San Francisco Tours," "Alcatraz Tours," and "Napa Wine Tours" began to decline. At the same time, defendant Groupon's AdWords link began to appear at or near the top of purchased placement search results for Google searches including the terms "San Francisco Tours," "Alcatraz Tours," and "Napa Wine Tours"

The tour company said in its complaint that, to its knowledge, Groupon only offered a single coupon on its group-discount buying Website that had to do with San Francisco and tours during since September of last year.

The reason Groupon was dominating the Google AdWords traffic for the selected San Francisco tour related search queries, is because it was running text ads that mentioned tour discounts it didn't offer, San Francisco Comprehensive Tours said in its lawsuit.

The tour company said in the suit that AdWords ads from Groupon would advertise "Napa at 50-90% off," with similar claims for San Francisco and Alcatraz, but a click-through would lead to no landing pages that offered such discounts.

Officials at Groupon, based in Chicago, could not be reached for comment on the suit and the claims of San Francisco Comprehensive Tours on Wednesday afternoon.

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Photos: Groupon signage is displayed on the entrance to the company's headquarters in Chicago on Dec. 14, 2010. Credit: Tim Boyle / Bloomberg

Facebook plans to test a Groupon-style service as part of its existing Deals service, which lets businesses pitch offers to users of the popular social networking service.

Facebook will launch the new daily deal in San Francisco, San Diego, Atlanta, Dallas and Austin, Texas.

With more than 600 million users, Facebook certainly has the critical mass and the social mojo to tap into the booming online deal market and compete with market leaders Groupon and LivingSocial. Facebook will showcase deals and encourage users to share those deals with friends.

U.S. consumer spending  on daily deal sites is on track to hit $3.9 billion in 2015 from $873 million in 2010, according to research firm BIA/Kelsey.

"Local businesses will be able to sign up to use this feature soon, and people will be able to find Deals in the coming weeks," Facebook said in the statement.

Facebook will sell deals through its own sales team and will work with partners including ReachLocal, Gilt City and OpenTable.

Analyst Greg Sterling has some thoughts here.

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Groupon's Super Bowl ads have been seen by many as a fumble on the part of the increasingly influential website.

So, on Friday, Groupon Chief Executive Andrew Mason called an audible and ditched the controversial advertising campaign.

"Five days have passed since the Super Bowl, and one thing is clear –- our ads offended a lot of people," Mason wrote in a company blog post on Friday. "Tuesday I posted an explanation, but as many of you have pointed out, if an ad requires an explanation, that means it didn't work."

The campaign of three ads, which first aired during the NFL championship game Sunday, featured actors speaking about current political, environmental and social issues before shifting their remarks to discounts on related products bought via Groupon.

The ads, which spoofed public service announcements, were meant to mock the Chicago-based company's roots as a company that raised funds for different social causes -- originally known as thepoint.com, Mason said.

"We thought we were poking fun at ourselves, but clearly the execution was off and the joke didn't come through," Mason said. "I personally take responsibility; although we worked with a professional ad agency, in the end, it was my decision to run the ads."

One of the most disliked ads of the campaign was a spot in which Timothy Hutton says, "The people of Tibet are in trouble, their very culture is in jeopardy. But they still whip up an amazing fish curry, and since 200 of us bought at Groupon.com, we're each getting $30 worth of Tibetan food for just $15 at Himalayan Restaurant in Chicago."

Groupon has promised it will run less polarizing ads going forward.

"We hate that we offended people, and we're very sorry that we did -– it's the last thing we wanted," Mason wrote. "We've listened to your feedback, and since we don't see the point in continuing to anger people, we're pulling the ads (a few may run again tomorrow –- pulling ads immediately is sometimes impossible)." 

The ads were launched with a website, savethemoney.org, that displayed the three ads and teased a fourth that never aired. But the site was never mentioned in the ads, leading many to not even know it existed. The site was taken down on Friday and the URL now re-directs users back to Groupon.com.

Despite the low awareness of savethemoney.org, Groupon said it expected to have raised about $500,000 for the groups linked to on the site: the Tibet Fund, Greenpeace and the Rainforest Action Network.

"While we've always been a little quirky, we certainly aren't trying to be the kind of company that builds its brand on creating controversy –- we think the quality of our product is a much stronger message," Mason wrote.

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Photo: A screen capture of Timothy Hutton in Groupon's first national offline advertising campaign, which debuted during the Super Bowl on Sunday. Credit: Groupon / Business Wire

Groupon's Super Bowl ads haven't gone over very well so far, particularly one spot dealing with Tibet and Tibetan food.

On Monday, Groupon CEP Andrew Mason attempted to justify the commercials in a blog post titled "Our Super Bowl Ads, and How We're Helping These Causes."

Mason writes, "We would never have run these ads if we thought they trivialized the causes — even if we didn't take them as seriously as we do, what type of company would go out of their way to be so antagonistic?"

During the NFL championship game Sunday, the online coupon company aired three ads that featured actors speaking about pressing environmental and social issues before turning the focus of their words toward getting a great deal on food or tourist attractions and a body waxing.

The advertisement that has caused the most backlash for Chicago-based Groupon so far is one featuring Timothy Hutton and Tibet.

In the 30-second commercial directed by Christopher Guest, Hutton says that "The people of Tibet are in trouble, their very culture is in jeopardy. But they still whip up an amazing fish curry, and since 200 of us bought a Groupon.com, we're each getting $30 worth of Tibetan food for just $15 at Himalayan Restaurant in Chicago."

Many viewers were angry and felt the ad inappropriately made light of the Chinese occupation of Tibet.

In another spot, Cuba Gooding Jr. pulls the same serious to light-hearted flip with whales and whale watching, saying about whales: "Today their numbers are dwindling. Somebody's got to save them. But it's more fun watching them jumping, playing. And since 100 of us bought at Groupon.com, we're each getting an $86 whale watching cruse for just $49."

Elizabeth Hurley, in the third Groupon commercial, says "The rainforest is irreplaceable, yet rampant deforestation is threatening this natural treasure. But not all deforestation is bad. And since 100 of us bought at Groupon.com we're all saving 50% on a Brazilian wax at Completely Bare in New York City."

Each ad ends with the words "Save the money, unlock great deals in your town. Groupon.com."

Twitter and Facebook were flooded with comments lambasting Groupon for the ads, which cost millions of dollars to produce and air during the U.S.'s biggest advertising event of the year.

Mason, in a blog post yesterday, explained the motivation behind the ads as was a bit of a play on Groupon being born from a philanthropy website, thepoint.com.

"When groups of people act together to do something, it's usually to help a cause," Mason wrote. "With Groupon, people act together to help themselves by getting great deals. So what if we did a parody of a celebrity-narrated, PSA-style commercial that you think is about some noble cause (such as "Save the Whales"), but then it's revealed to actually be a passionate call to action to help yourself  (as in "Save the Money")?"

Along with the ads, Groupon launched a website called savethemoney.org,which pairs each advertisement with links to donate to organizations that are helping the cause the commercials mention.

Mason said that Groupon will match donations to the real-world organizations to each cause, of up to $100,000, for the Tibet Fund, Greenpeace and the Rainforest Action Network.

But the attempt to raise money for the three respective organizations were not mentioned in the television ads themselves, leading many to not even mention that aspect of the campaign when criticizing them.

Phil Rosenthal, the Chicago Tribune's media critic, blasted the ads writing, "sensitivity, empathy and taste? They're at least half-off at Groupon."

As Rosenthal reported, CNBC's sports business journalist Darren Rovell joked on Twitter, "after their Super Bowl commercial, Groupon's valuation has gone from $15 billion to $15."

One Twitter user, @jung10, wrote: "Groupon Exploits Tibet for Superbowl Commercial" Titled differently, this would make a perfect Onion piece. #sicksad." 

Danny Sullivan, the editor of the site Search EngineLand, seemed a bit dumbfounded by the ordeal, writting on Twitter, "still don't even get why groupon, a viral success story, needed a superbowl ad. waste of money & PR."

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Video: Groupon Superbowl add "Save The Money - Tibet" featuring actor Timothy Hutton. Credit: Groupon via YouTube

Google is currently testing Google Offers, a product that could rival the popular Groupon voucher website.

The move to develop such an service comes after Google reportedly tried and failed to buy Chicago-based Groupon for as much as $6 billion.

Nate Tyler, a Google spokesman, sent this statement to the Technology blog Friday morning:

Google is communicating with small businesses to enlist their support and participation in a test of a pre-paid offers/vouchers program. This initiative is part of an ongoing effort at Google to make new products, such as the recent Offer Ads beta, that connect businesses with customers in new ways. We do not have more details to share at this time, but will keep you posted.

Google's approach with Google Offers is likely to be similar to that of Groupon, which teams with local businesses to offer discounted products and services that are issued only when a set number of people agree to purchase the deal. Groupon's offers are usually only offered in a specific city with a company local to that city.

Groupon's profile has risen in recent months, particularly after the reports of Google, a tech heavyweight, wanting to buy it. Founded in November 2008, Groupon recently raised $950 million in financing. The website operates in 35 countries and has more than 50 million subscribers.

The company's revenue comes from taking a cut from each discount coupon it sells.

The website Mashable broke the news of Google Offers Thursday night.

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Online coupon distributor Groupon announced that it has reached its goal of raising $950 million in financing.

The daily-deals company, which recently spurned a takeover bid from Google rumored to be as high as $6 billion, released a statement Monday with the tongue-in-cheek heading “Groupon raises, like, a billion dollars.”

According to Groupon’s statement, the financing came from venture firms and late-stage investors including Andreessen Horowitz, Battery Ventures, Greylock Partners, Kleiner Perkins Caufield & Byers, Mail.ru Group, Maverick Capital, Silver Lake, and Technology Crossover Ventures. Previous funding rounds were led by New Enterprise Associates, Accel Partners, and Mail.ru Group (formerly DST).

The company, founded in 2008 in Chicago, operates in 35 countries and has more than 50 million subscribers. Its revenue comes from taking a cut from each discount coupon it sells through its website.

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Photo: Groupon signage outside the company's headquarters in Chicago. Credit: Tim Boyle / Bloomberg

LinkedIn may be the first company to quench investor thirst for the red-hot social networking market.

Despite months of headlines from Facebook, Groupon and Twitter, the Mountain View, Calif., company which connects more than 85 million professionals could be first out of the gate. It has been quietly preparing an initial public offering for as early as the first quarter.

LinkedIn has hired Bank of America Merrill Lynch, Morgan Stanley and JPMorgan Chase to advise it after a round of interviews in November. The size of the offering is not known, but it's expected to be small relative to the company's valuation. LinkedIn's implied valuation on the private trading marketplace SharesPost is $2.2 billion.

Tapping the public markets could be a smart play for LinkedIn, which could benefit from heightened investor interest in social media and get out in front of a blockbuster Facebook IPO expected in 2012.

"LinkedIn has its own story to tell, and this gives them a window to get out there and tell that story," said BGC Partners analyst Colin Gillis. "Even though the business models are different, it's wise for LinkedIn to get out there and avoid getting lost in the Facebook noise."

A LinkedIn spokesman declined to comment on the speculation. "An IPO is one of many tactics that we could choose to pursue," he said in an e-mailed statement. "We are focused on building our business and doing what is in the best long-term interest of LinkedIn members and shareholders."

The IPO plans were earlier reported by Reuters.

LinkedIn, which has more than 1,000 employees, may not have the explosive growth of Facebook but it is one of the first social media websites to become profitable, making money from premium services and advertising. LinkedIn does not disclose financial results but estimates of 2010 revenue are $200 million.

LinkedIn is the brainchild of former PayPal executive and early Facebook backer Reid Hoffman, a successful Silicon Valley entrepreneur and investor who helped usher in the social networking boom. LinkedIn's investors include Sequoia Capital, the famous venture capital firm that backed Apple, Google and Oracle, Greylock Partners (where Hoffman now works), Bessemer Venture Partners and Goldman Sachs. LinkedIn has raised more than $100 million in venture capital.

It's no secret that LinkedIn has been planning an IPO, although LinkedIn Chief Executive Jeff Weiner ducked the issue in a November interview. Weiner, a former Yahoo executive, joined LinkedIn in December 2008 and became chief executive officer in June 2009.

"You don't necessarily have to go public to get to the next level," he said.

But an IPO could be a springboard to accelerate the site's growth in the United States and overseas. LinkedIn has added 30 million users in the last 12 months alone.

"We believe LinkedIn is growing rapidly, in terms of membership, engagement, and revenue, and the market would be very accommodating," Wedbush Securities analyst Lou Kerner said.

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Online coupon company Groupon reported Thursday that it has raised $500 million in financing, bringing it more than halfway to its goal of $950 million.

The privately held company disclosed its financing in a filing with the Securities and Exchange Commission.

Earlier in the week, Groupon founder and Chief Executive Andrew Mason wrote on Twitter that "Groupon is in the process of completing a new round of financing -- we'll let everyone know when there's more to announce."

The company recently resisted a Google takeover bid rumored to be as much as $6 billion. According to estimates from VCExperts.com, the new round of financing makes Groupon worth about $6.4 billion.

Its backers include Chicago-based investors Eric Lefkofsky and Brad Keywell, the venture capital firms New Enterprise Associates and Accel Partners, and the Russian firm Mail.ru Group, which was formerly named Digital Sky Technologies.

Founded in 2008, Groupon reported 35 million subscribers and 18 million Groupons sold in North America as of November.

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Photo: A message from Groupon Chief Executive Andrew Mason about a new round of financing for the company appears in this screen grab from the Twitter social-networking website on Wednesday. Credit: Twitter via Bloomberg

Groupon, which recently turned down a takeover bid from Google rumored to be as high as $6 billion, is out to raise money on its own in a big way.

The online coupon company’s board has authorized it to raise up to $950 million, according to a report from the website VCExperts.com. That would be the largest round of equity financing since Pixar sought about $500 million in 1995.

A Groupon spokeswoman declined to comment, but Andrew Mason, the company's founder and chief executive, wrote in a Tuesday-evening message on Twitter, "Groupon is in the process of completing a new round of financing -- we'll let everyone know when there's more to announce."

According to estimates from VCExperts, the new round of financing would make the privately held Groupon worth about $6.4 billion.

Currently, Groupon operates in 35 countries, with more than 3,000 employees and expected annual revenue of $500 million this year.

The company is said to have turned its first profit after just seven months in business.

Its backers include Chicago-based investors Eric Lefkofsky and Brad Keywell, the venture capital firms New Enterprise Associates and Accel Partners, and the Russian firm Mail.ru Group, which was formerly named Digital Sky Technologies.

Groupon makes its money by taking a 50% cut of each discount coupon it sells through its website.

As of November, Groupon had about 35 million users, with 18 million Groupon coupons sold in North America, the company said on its website.

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Photos, from top: Groupon signage is displayed on the entrance to the company's headquarters in Chicago on Dec. 14. Groupon employees at the company's headquarters. Credit: Tim Boyle / Bloomberg

Skyara wants to turn you into a weekend warrior. Or cappuccino maker. Or blogger. Or mountain biker.

Think of Skyara as a marketplace for experiences: Hatha yoga, making balloon animals, becoming "remarkable." (Seriously want to sign up for that one).

People can offer their services on Skyara's website, and if someone hires them for that service the site gets 12% of the transaction.

Right now Skyara is testing its business in San Francisco. Some of the listings include activities popular with tourists, such as walking tours of San Francisco architecture, Chinatown or the North Beach culinary scene. But there's also an Army Ranger who for $50 will train you in marksmanship or for $20 will get you into shape with Army fitness training (currently sold out, bummer). Aber Whitcomb, a MySpace co-founder, is offering trap and skeet shooting. You can also take lessons in extreme kiting and contact juggling.

Skyara was started by longtime pals Jonathan Wu and Dennis Liu. They were working in New York City in consulting jobs, dreaming of running their own start-up. They were drawn to adventure and travel so they came up with Skyara and were accepted to I/O Ventures, a San Francisco tech incubator. They convinced a third partner, Steven Ou, in the final stretch of college to give up on his post-graduation job at UBS and join them instead. They moved to San Francisco about six months ago.

"We built Skyara with the concept that everyone has something interesting to share, whether it's a fun hobby, job or a skill that other people would be interested to learn," Wu said. "Most people offering experiences are not doing it for the money. They are doing it to share their hobbies and have some fun and meet new people."

For example, Liu, who grew up fishing with his dad, has been offering crabbing under the Golden Gate Bridge for $30. He's sold out and will add more slots in the new year. Wu, an expert salsa and swing dancer, is offering an evening at a salsa club for $5. "I just moved to San Francisco and I don't know too many people. My idea is to grab coffee beforehand, meet some people and go to the club where I can show people some basic moves."

"Skyara," he said, "is a combination of Etsy and Airbnb for experiences and Meetup for a fun way to meet new people."

Offering a service on Skyara to raise money for a cause is another way to spread awareness of and get more people involved with that cause, Wu added.

So far, Skyara, which has gotten press from TechCrunch, GigaOm, Wired and VentureBeat, doesn't have that many listings, about 200 in all. The trio is trying to jump-start the site by getting people to request experiences. For instance, I/O Venture partner Paul Bragiel wants to ride along with a San Francisco cab driver on a Saturday night.

I am holding out for the ultimate experience: Tea with MC Hammer and angel investor Ron Conway.

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Photos, from top: Fun with balloons; PT with an Army Ranger; MC Hammer and Ron Conway, ready for tea. Credit: Skyara.com