Groupon makes money by getting a percentage revenues from the retailer or restaurant that offered a deal. Even if one deal is not very profitable, Groupon stands to and recently has become extremely profitable because they offer at least one deal every day. While making a profit Groupon also helps small local businesses find new customers. For local mom and pop shops Groupon has become a popular and successful alternative to to conventional advertising. This new form of advertising allows local businesses to pay for real results that come from Groupon deals. Groupon has become so successful that they are now expanding into the Asian market. They launched Groupon Japan this past summer, They recently acquired uBuyiBuy, Beeconmic, and Atlaspost which has relaunched as Groupon Hong Kong, Singapore, and Taiwan. (Groupon in Asia)
Groupon's success has recently got the attention of a well known corporate giant known as Google. (Google Interested in Groupon) Questions have risen whether Groupon shouldd allow themselves to be bought out. From the perspective of Groupons current owners the answer is a resounding yes. Even though I would no longer consider Groupon a small business anymore. This is a small business owners dream, to be able to create a unique product or service and be able to sell it off to the largest interested buyer in the market. Groupon should act quickly to sell to Google because there have been a large number of copycats that have copied Groupon's model of business and can possibly end Groupon's reign of success.
Hey Jeff, I do agree with your post as far as the buyout goes. Why do you think Groupon should sell itself to Google so quickly? The question would be what is Groupons USP (unique selling proposition)? Despite the fact that there are many copycats in the market, I think Groupons USP is it's size. For now they have a little over 35 million subscribers in 20 countries and over 3000 employees. Do you really think Groupon should sell to Google now, or should they hold on to their business model and try to get a bigger steak of the market. The current price offered is $ 5.3 billion (see my blog). In my opinion this is a very sophisticated approach of doing business and the business owner Mr. Mason should look at its recent growth. The company has 35 million subscribers that's true. But as I see a great opportunity in that business I'd rather say: The company only has 35 million subscribers aiming for 70 million in 6 months from now.
ReplyDeleteI think Mr. Mason should wait a little and probably go for double the amount that has been offered now.
Google offered $5.3 billion to Groupon which itself shows that even the internet giant like them have started beliving in the potential of Groupon. I don’t think it be sensible for them to sell out to Google. I agree there have been a large number of copycats that have copied Groupon's model of business but they don’t stand a chance to drive down profits of GroupOn. Groupon has the advantage of having entered the market first, and whenever you think of online coupons, You think of Groupon. No other sites can steal this advantage.
ReplyDeleteGroupon just turned down the offer today. Good call guys.
ReplyDeleteThere was talk about a possible IPO but that wont be officially discussed until 2011... In my opinion i think they should sell to google sometime. I think it will be better for the consumer if they are attached to google. check out my blog to find out why
Jeff, I agree with your opinion that Groupon should take Google's offer. Regarding LCzap's comment, yes Groupon has achieved that size by growing exponentially since 2008. This is achieved by having first mover advantage in a fast growing environment that is the internet. I have some doubts about the sustainability of Groupon's business model,because anybody can do it. In my opinion Mr. Mason should have taken the $5.3 billion and run away! There are too many variables in order to say that the company would be successful in the future.
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