Google Buys Groupon for $2.5 Billion?(vator.tv)
vator.tv
Google Buys Groupon for $2.5 Billion?
http://vator.tv/news/2010-11-28-google-buys-groupon-for-25-billion
69 comments
Via anecdotal comments from business owners I've spoken with here in Philadelphia, most Groupon participants reported no long term increase in sales.
The beauty of Groupon was it's timing, gaining massive ground during the worst recession the country has seen. Business owners would do anything short of giving products or services away for free to get people in their stores.
Their Groupon exposure certainly filled their store for that day, but often at the expense of the business owner (at least two SMB I talked to reported the event cost them more than it brought in) and didn't result in a long term increase as hoped.
The longevity of their profits therefor, if this is more than anecdotal, is indeed in question.
The beauty of Groupon was it's timing, gaining massive ground during the worst recession the country has seen. Business owners would do anything short of giving products or services away for free to get people in their stores.
Their Groupon exposure certainly filled their store for that day, but often at the expense of the business owner (at least two SMB I talked to reported the event cost them more than it brought in) and didn't result in a long term increase as hoped.
The longevity of their profits therefor, if this is more than anecdotal, is indeed in question.
Is "no long term increase in sales" amidst "the worst recession the country has seen" actually as bad as it sounds? Maybe Groupon actually saved them from a decline in sales?
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I'm pretty skeptical of this report.
$2.5B is 2x the $1.3B post money valuation they got just six months ago.
Groupon is supposedly looking to close a new round, acquisition rumors can't hurt that process.
I don't see vator having an exclusive like this, let alone broken on a sunday night.
Twelve hours later and few "legit" news sources have picked up the news. Everyone who has is simply re-reporting vator. If google really had a $3B deal in the bag, the WSJ would have been able to get enough off the record confirmation to run it as a rumor. IMO they've had enough time to look at this so they've passed on reporting on it.
$2.5B is 2x the $1.3B post money valuation they got just six months ago.
Groupon is supposedly looking to close a new round, acquisition rumors can't hurt that process.
I don't see vator having an exclusive like this, let alone broken on a sunday night.
Twelve hours later and few "legit" news sources have picked up the news. Everyone who has is simply re-reporting vator. If google really had a $3B deal in the bag, the WSJ would have been able to get enough off the record confirmation to run it as a rumor. IMO they've had enough time to look at this so they've passed on reporting on it.
I can't really figure out what this purchase is about, if it has indeed gone down.
Google usually acquires tech companies. Groupon is a marketing company with a good business model. What would Google want to do with this? Integrate into Gmail/Google Checkout?
Google usually acquires tech companies. Groupon is a marketing company with a good business model. What would Google want to do with this? Integrate into Gmail/Google Checkout?
Google is an advertising company which likes models which scale to the moon. Groupon is an advertising company which demonstrably scales to the moon.
One possible strategy for Google is to stop messing around with the seven-pack on queries like "Houston Pizza" and start selling the AdWordsGroupon among Houston Pizza shops at the top of that search result. This takes the AdWords learning cliff out of the local retail sales equation, because retailers grok "Check this out: you give us a big discount, we will sell your stuff, then we give you a check for this much and you service people who come in with a coupon -- no money down and no risk!" much more than they do "OK, so you front us a couple thousand dollars for CPC ads and if your QS outperforms competitors in the local auction for the query string, match options dependent, then as long as your CTR is decent we'll send the user to your landing page and you might achieve a conversion which if it has a CPA less than your LTV is a win for you. P.S. If you don't understand that, Pizza Shop Owner Guy, Google Customer Service says to FOAD."
One possible strategy for Google is to stop messing around with the seven-pack on queries like "Houston Pizza" and start selling the AdWordsGroupon among Houston Pizza shops at the top of that search result. This takes the AdWords learning cliff out of the local retail sales equation, because retailers grok "Check this out: you give us a big discount, we will sell your stuff, then we give you a check for this much and you service people who come in with a coupon -- no money down and no risk!" much more than they do "OK, so you front us a couple thousand dollars for CPC ads and if your QS outperforms competitors in the local auction for the query string, match options dependent, then as long as your CTR is decent we'll send the user to your landing page and you might achieve a conversion which if it has a CPA less than your LTV is a win for you. P.S. If you don't understand that, Pizza Shop Owner Guy, Google Customer Service says to FOAD."
One interesting difference is that each 'groupon' is sold by a sales person, and has its witty copy prepared by a staff writer, whereas most of adwords is 100% self service. That's the main reason it would surprise me if google did in fact acquire groupon.
over time Google could automate a lot of this and increase the margins on the business; the acquisition makes a lot of sense from my vantage
Google's automation of customer facing services is exactly how they kill businesses. Google Checkout is horrendous and is going nowhere, and their customer-facing efforts with the Nexus One, while a model of efficiency, were a dismal failure.
There are some things you can't automate. Putting a personalized, humorous face on offers is a major value of Groupon, and Google can't automate that.
There are some things you can't automate. Putting a personalized, humorous face on offers is a major value of Groupon, and Google can't automate that.
Another plus for Google... they could sell the customer analytics to their AdWords customers. For example, using Groupon data, they know that the 50% off Pizza deal was more popular in West LA than in the OC. They could sell this data to Dominos who places AdWords in those two areas, and Dominos would then spend more on OC ads.
Although there might be some privacy laws that are in conflict here, Googs could probably sell the overall data (aka 58% of registered users bought this in West LA, 24% in OC), without giving away customer specifics (aka Bill Smith bought this)
I'm sure there are other ways too Google could capitalize on this.
Although there might be some privacy laws that are in conflict here, Googs could probably sell the overall data (aka 58% of registered users bought this in West LA, 24% in OC), without giving away customer specifics (aka Bill Smith bought this)
I'm sure there are other ways too Google could capitalize on this.
Pulling a bit more on that thread: Not only would it allow them to decrease the barrier to advertising for small and local businesses, it would even allow them to monetize their search traffic much better than PPC text ads.
For example, "Houston Pizza" has an average CPC of around $1.55 according to Google's Keyword Tool. If instead, they are able to sell a Groupon for a $30 pizza at the low price of $15, they are at $7.50 revenue. They've just increased their revenue per search 2-5x, depending on how many ads a person used click on before. This doesn't even take into account the increase in click through rate when you can see a ad that basically says you get half off the pizza you already want.
If Google is able to get this kind of increase with just 10% of it's advertising revenue ($15.7 billion from just Adwords on Google websites in 2009 according to http://investor.google.com/financial/tables.html), this deal would pay for itself in about 19 months.
Effectively, they are moving higher in the food chain, similar to what they did in the lending market. Instead of selling ad space, they will be taking a commission on the sales they bring you.
For example, "Houston Pizza" has an average CPC of around $1.55 according to Google's Keyword Tool. If instead, they are able to sell a Groupon for a $30 pizza at the low price of $15, they are at $7.50 revenue. They've just increased their revenue per search 2-5x, depending on how many ads a person used click on before. This doesn't even take into account the increase in click through rate when you can see a ad that basically says you get half off the pizza you already want.
If Google is able to get this kind of increase with just 10% of it's advertising revenue ($15.7 billion from just Adwords on Google websites in 2009 according to http://investor.google.com/financial/tables.html), this deal would pay for itself in about 19 months.
Effectively, they are moving higher in the food chain, similar to what they did in the lending market. Instead of selling ad space, they will be taking a commission on the sales they bring you.
As scary as this thought is: I think that is small potatoes. Google ends the day with an email address of a person known to buy heavily discounted pizza in Houston. I think that fact is worth upwards of $50. They can, in a totally automated, split testable, scales to the moon fashion offer him a customized, personal, expires in 4 hours 60% GroupOn for the next 50% off offer they get.
Money. Hats.
Money. Hats.
I don't think increasing their revenue per search is going to be small potatoes but I agree that getting that email and connecting it with purchase data is going to be hugely valuable.
What we're both talking about are just two sides of the same coin. The goal is maximizing the total lifetime value of the customer. One approach is by increasing the revenue per transaction and the second is increasing the number of transactions per customer. (Third would be increasing referrals per customer but that probably won't factor in as much, I suspect.)
What we're both talking about are just two sides of the same coin. The goal is maximizing the total lifetime value of the customer. One approach is by increasing the revenue per transaction and the second is increasing the number of transactions per customer. (Third would be increasing referrals per customer but that probably won't factor in as much, I suspect.)
There might be a few different possibilities:
* As a basic building block, it gives them an established competitive advantage (mostly branding & engaged vendors) against Facebook Places/Local Deals, meaning Facebook would have less leverage over them in the future. They might be interested in the local aspect of Groupon, specifically with the self service they launched recently. Integrating Groupon into Google Places would give their Places section a lot more meat.
* They might be liking the pure revenue that the business could produce. You have to remember that during stockholder conference calls, they get questions like "what is the next billion dollar product for Google?" from analysts and Groupon is printing money right now (according the hear-say reports that have been covered in media.)
* Google has stayed completely self-service on the sales side of things. Groupon has a large sales staff from what I hear. One possibility (though slightly far fetched) is they might use their experience with successfully managing the Groupon sales staff to ramp up a sales team for Google Apps for the enterprise market.
* As a basic building block, it gives them an established competitive advantage (mostly branding & engaged vendors) against Facebook Places/Local Deals, meaning Facebook would have less leverage over them in the future. They might be interested in the local aspect of Groupon, specifically with the self service they launched recently. Integrating Groupon into Google Places would give their Places section a lot more meat.
* They might be liking the pure revenue that the business could produce. You have to remember that during stockholder conference calls, they get questions like "what is the next billion dollar product for Google?" from analysts and Groupon is printing money right now (according the hear-say reports that have been covered in media.)
* Google has stayed completely self-service on the sales side of things. Groupon has a large sales staff from what I hear. One possibility (though slightly far fetched) is they might use their experience with successfully managing the Groupon sales staff to ramp up a sales team for Google Apps for the enterprise market.
Google has 15 B in cash. Every year they make another 8 B in cash. 99% of the revenue for Google comes from Advertising. I think Google has realized what everyone else knows...it's time to just buy random stuff that makes more money.
Groupon has over 500 highly trained inside sales reps working out of their Chicago headquarters.
These reps have established relationships with probably 100,000 [1] local businesses who are willing to spend money on online advertising.
Google's existing advertising products are all self-serve. (Large accounts get assigned a rep, but only ex post facto.)
This acquisition makes a ton of sense: Google gains a kick-ass AdWords sales team. With every Groupon sold, they would have the opportunity to ask the merchant "Can I tell you about our AdWords program?"
[1] My estimate: 730 days of deals, 3 deals per day, 50 cities = 109,500 deals. Granted, not all cities have side deals, and not all cities have been live for all 730 days, but they're closing in on 100,000 merchants fast.
These reps have established relationships with probably 100,000 [1] local businesses who are willing to spend money on online advertising.
Google's existing advertising products are all self-serve. (Large accounts get assigned a rep, but only ex post facto.)
This acquisition makes a ton of sense: Google gains a kick-ass AdWords sales team. With every Groupon sold, they would have the opportunity to ask the merchant "Can I tell you about our AdWords program?"
[1] My estimate: 730 days of deals, 3 deals per day, 50 cities = 109,500 deals. Granted, not all cities have side deals, and not all cities have been live for all 730 days, but they're closing in on 100,000 merchants fast.
This acquisition makes a ton of sense: Google gains a kick-ass AdWords sales team
But for two and a half billion dollars?
But for two and a half billion dollars?
No. Most of the $2.5B is because of the phenomenal revenues that Groupon is currently generating.
But Google isn't just interested in revenues, otherwise they would buy a small oil company - they are interested in Groupon because they are profitable and provide an asset that plays well with Google's core product.
But Google isn't just interested in revenues, otherwise they would buy a small oil company - they are interested in Groupon because they are profitable and provide an asset that plays well with Google's core product.
You don't think a kick-ass adwords sales team could generate billions upon billions of revenue for Google?
I would venture a guess and say that this integrates beautifully into their local advertising offerings.
That's my primary reason for not believing this story. I just can't think of a plausible reason Google would want them. Their technology is laughably simple to replicate and combined with Google's existing advertiser relationships would be much more powerful -- this seems like a clear case of build, not buy (especially when the purchase price is so steep).
As my entrepreneurial mentor taught me, it's 50% about solving a problem and 50% about figuring out distribution. Groupon's advantage isn't tech, it's massive distribution and thousands of well-trained sales reps with strong relationships in local communities?
Do you really think Google could replicate that? It advertiser relationships are definitely not tapped into local communities like Groupon. In fact, that's probably the big reason for the acquisition -- local relationships.
Do you really think Google could replicate that? It advertiser relationships are definitely not tapped into local communities like Groupon. In fact, that's probably the big reason for the acquisition -- local relationships.
REALLY like that saying about 50% problem 50% distribution.
I think you hit it spot on. I see Groupon, yelp, foursquare, all as going after the local space. Some people saw it as a tech problem, some people just looked at it as a distribution problem.
GroupOn found the low tech extremely scalable solution, and is reaping the benefits.
Companies like Foursquare are probably a couple of years away from having enough businesses do self service on their tech solution...
I think you hit it spot on. I see Groupon, yelp, foursquare, all as going after the local space. Some people saw it as a tech problem, some people just looked at it as a distribution problem.
GroupOn found the low tech extremely scalable solution, and is reaping the benefits.
Companies like Foursquare are probably a couple of years away from having enough businesses do self service on their tech solution...
I can think of one. They could bring Groupon into Adwords and sell deals directly from searches. The auction mechanics of Adwords might work well with Groupon. Of course this would rely on Groupon working purely automatically - if it required any kind of business relationships and customer service (like it does now) then Google would kill it.
Sure automating the process of selling discount vouchers might well work, but they don't need to buy Groupon to be able to create discount vouchers based on an adaptation of their own self-service model. They have more access to eyeballs than Groupon's mailing list anyway
Much of the value of the company Groupon lies in the sales team, which makes it an uncharacteristic acquisition target for Google.
Much of the value of the company Groupon lies in the sales team, which makes it an uncharacteristic acquisition target for Google.
Yeah maybe I was trying a bit hard. Though there is also the Groupon brand and concept.
My guess is Maps. Every desktop gMaps and mobile gps app request would contain money-saving coupons targeted for any generic POI search (like "coffee" or "hair salon") in its results.
Google's long struggled to break into local. At 2.5B, Groupon's going to look like an even bigger steal than YouTube.
On the YouTube front, I'd argue that things are not really a "steal" unless we they were purchased for well below market value at the time. I don't know that we have much evidence that Google underpaid by a lot given circumstances at YouTube (they were burning through cash pretty fast).
Fair point. There may have been very few, if any, parties willing to pay what Goog paid for YT. From that angle, it hardly looks like a steal.
But if you think about YT's growth and strategic fit since the acquisition, it looks like a steal for 1.6B. Meaning, had a competitor known that YT could be such a key to google, there would be many more takers for it.
But if you think about YT's growth and strategic fit since the acquisition, it looks like a steal for 1.6B. Meaning, had a competitor known that YT could be such a key to google, there would be many more takers for it.
You mean you missed all the buzz about Google being behind on local?
The local ad market is $170B a year in the USA alone. Online is 12, TV is 70. Doesn't take a genius.
The local ad market is $170B a year in the USA alone. Online is 12, TV is 70. Doesn't take a genius.
Possibly do a seamless integration with adwords so companies building out campaigns can easily integrate groupon. Or better yet integrate it into admob so they start pushing localized coupons to ad based mobile apps.
The article says that Groupon has inspired hundreds of clones... Why do you think some of them (LivingSocial) have taken off and others have been lost in the dust?
Purely anecdotal self-examination:
I've bought stuff off LivingSocial and it was because they had deals that were really fun (ex. white water rafting.) I got a number of my friends to also buy so we could all go together. I bought other things from afterwards... particularly if they were fun or social, such as skydiving. In examining my experience, I see a few factors at play:
* Sell what people want to buy.
* Connecting with an audience that will buy repeatedly.
* Incentives to spread the deals. The activity may be social in nature (such as white water rafting) or they might have a financial incentive (get 5 people to buy and yours is free.)
I'm not sure if the other knockoff's had these elements but I could see how they helped LivingSocial earn at least $1000 from me and my friends in the last year.
I've bought stuff off LivingSocial and it was because they had deals that were really fun (ex. white water rafting.) I got a number of my friends to also buy so we could all go together. I bought other things from afterwards... particularly if they were fun or social, such as skydiving. In examining my experience, I see a few factors at play:
* Sell what people want to buy.
* Connecting with an audience that will buy repeatedly.
* Incentives to spread the deals. The activity may be social in nature (such as white water rafting) or they might have a financial incentive (get 5 people to buy and yours is free.)
I'm not sure if the other knockoff's had these elements but I could see how they helped LivingSocial earn at least $1000 from me and my friends in the last year.
The second part is (I think) relatively easy: Some startups fail regardless of the basic idea. Start 100 Amazons in 1995 and at least a certain number will fail.
The first part (why are some succeeding?) is an interesting one. I'll venture a couple:
(a) This business not a natural monopoly to the same extent as many online businesses. Groupon have (I think) one offer at a time. If you're in the mood for groupon, why not check in on five, see what they have today? They could of course have lots of deals but that'd be doing things differently.
(b) Groupon is about localization at the city level. Their are still more cities than Groupon can take. Being the best dealoftheday site for Newcastle is an achievable goal. Maybe this is a subset of the former.
The first part (why are some succeeding?) is an interesting one. I'll venture a couple:
(a) This business not a natural monopoly to the same extent as many online businesses. Groupon have (I think) one offer at a time. If you're in the mood for groupon, why not check in on five, see what they have today? They could of course have lots of deals but that'd be doing things differently.
(b) Groupon is about localization at the city level. Their are still more cities than Groupon can take. Being the best dealoftheday site for Newcastle is an achievable goal. Maybe this is a subset of the former.
It's all about how good they are at marketing and sales. I can't speak for everyone but LivingSocial is very good at optimizing their landing pages, builds great PPC campaigns and has a very strong affiliate program.
Living Social is the only one I've seen that has the offer volume of Groupon (always a good offer, every day). I think that's the key.
I've done some modest research here, and it seems like the surest sign that one is going to die is when the deals start being every other day, than once every few days, etc. I've yet to see one recover from this downward spiral.
I've done some modest research here, and it seems like the surest sign that one is going to die is when the deals start being every other day, than once every few days, etc. I've yet to see one recover from this downward spiral.
Brand name. If Wasabi has taught us anything, it's that brand name is the only thing that matters for a company.
Is that referring to Brand name deals or building a company brand? I'm guessing the latter. But even groupon is just becoming a recognizable brand. They are #1 but the dust has yet to settle. I would say thier abity to drive demand to a deal is the main reason they are so strong.
And that it's Wesabe makes that point even more :)
How reliable is this source? I've never heard of Vator TV, but it seems like Groupon is worth a lot more than $2.5b if they're making $50m/month while they're still relatively young.
Interesting about the revenue. Arrington pegged them at $30 million a month earlier this year. Somebody may be off.
http://techcrunch.com/2010/04/15/the-rest-of-the-details-on-...
http://techcrunch.com/2010/04/15/the-rest-of-the-details-on-...
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Let's see if this follows Google's previous purchases like Etherpad, Dodgeball and GrandCentral.
Perhaps they'll close down Groupon to new users, give it a really confusing horrible ('flexible!') interface which no one quite understands, then shut it down after a year of development on that interface and 4 months after launch.
On the other hand, all of those were tech acquisitions - this is more of a marketing/advertising one, which Google groks better. It's also a company that already has cashflow going, so there may be more incentive to keep that going.
Perhaps they'll close down Groupon to new users, give it a really confusing horrible ('flexible!') interface which no one quite understands, then shut it down after a year of development on that interface and 4 months after launch.
On the other hand, all of those were tech acquisitions - this is more of a marketing/advertising one, which Google groks better. It's also a company that already has cashflow going, so there may be more incentive to keep that going.
Etherpad is making its way into Google Docs... of the 3 you mentioned, only Dodgeball was neglected.
Etherpad's team was initially put on google wave (the reference to bad interface above) before that was shut down (also referenced above). Etherpad itself was shut down before a replacement was made available (by google - the code was released which was nice).
My point is that there's typically this huge gap between acquisition and any demonstrable positive action. During that gap, there's either no change at all or the service is hobbled/impaired, during which time competitors could come in to the market.
In those tech acquisitions, the barrier to entry was kinda high (hard to write a good replacement for etherpad quickly). The barrier to entry in groupon-space is nill - there's dozens of copycats already. If Google takes its time as its done with other acquisitions, they may end up owning the #2 or #3 player in this space within a year.
You'd think with the muscle of Google behind them, nothing could go wrong, but if Google doesn't choose to do anything useful with them (perhaps only buying to prevent MS or Yahoo from owning them), it could still stagnate.
My point is that there's typically this huge gap between acquisition and any demonstrable positive action. During that gap, there's either no change at all or the service is hobbled/impaired, during which time competitors could come in to the market.
In those tech acquisitions, the barrier to entry was kinda high (hard to write a good replacement for etherpad quickly). The barrier to entry in groupon-space is nill - there's dozens of copycats already. If Google takes its time as its done with other acquisitions, they may end up owning the #2 or #3 player in this space within a year.
You'd think with the muscle of Google behind them, nothing could go wrong, but if Google doesn't choose to do anything useful with them (perhaps only buying to prevent MS or Yahoo from owning them), it could still stagnate.
"My point is that there's typically this huge gap between acquisition and any demonstrable positive action. During that gap, there's either no change at all or the service is hobbled/impaired, during which time competitors could come in to the market."
ok i agree. it does take _forever_ for google to convert its acquisitions over to their infrastructure, often with no improvements to the service initially.
ok i agree. it does take _forever_ for google to convert its acquisitions over to their infrastructure, often with no improvements to the service initially.
The way money is made on the internet is about to change. Which means the internet is about to change. Yes, all of it.
Ignore any line containing the phrase "$2.5 billion." The dollar figure is a formality. This isn't an acquisition. It's a teaming-up, a joining of forces. Google is D-Wade and Groupon is LeBron. Kobe? Amazon.
Amazon is the best at what it does, i.e. selling the way it sells. Trying to sell the way they sell, nobody ever stood a chance against them. Amazon is Wal-Mart in a world where Mom & Pop stores lack small town charm and are hidden on remote desert islands. You want to make money, you'd better build yourself a lighthouse with a helluva giftshop. Groupon, though, doesn't sell the way Amazon sells. They're totally different. And now they've got Google behind them, and everything that means. Watch out.
Everything Google's ever done, every service they've ever offered, was made (hugely) profitable through advertising, direct or indirect, of one form or another. Google makes money helping others make money. They sell to the salesman. With Groupon, they'll become the salesman. Everything is about to change.
Ignore any line containing the phrase "$2.5 billion." The dollar figure is a formality. This isn't an acquisition. It's a teaming-up, a joining of forces. Google is D-Wade and Groupon is LeBron. Kobe? Amazon.
Amazon is the best at what it does, i.e. selling the way it sells. Trying to sell the way they sell, nobody ever stood a chance against them. Amazon is Wal-Mart in a world where Mom & Pop stores lack small town charm and are hidden on remote desert islands. You want to make money, you'd better build yourself a lighthouse with a helluva giftshop. Groupon, though, doesn't sell the way Amazon sells. They're totally different. And now they've got Google behind them, and everything that means. Watch out.
Everything Google's ever done, every service they've ever offered, was made (hugely) profitable through advertising, direct or indirect, of one form or another. Google makes money helping others make money. They sell to the salesman. With Groupon, they'll become the salesman. Everything is about to change.
Is it just me, or does this read like Steve Gillmor?
I don't know who that is. I don't know who D-Wade is either. Though I think LeBron might be a basketball player.
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Um, you're neglecting that the Heat have a 9-8 record that includes some very embarrassing losses.
I suspect that some aspect of Groupon is a Ponzi scheme, and that if Google buys them, it will work out about as well as Yahoo's acquisition of broadcast.com.
I suspect that some aspect of Groupon is a Ponzi scheme
In what way?
Groupon has a clever model but their valuation is precarious because it's easily copied. If anything I would say it is already past its peak.
Not only are there the restaurant/teeth whitening/facial generalist competitors (many of them backed by newspapers that already have sales teams and business relationships), I've been seeing a lot of niche competitors appear as well, which really makes sense. The web is naturally distributed so there's no added barrier participating in multiple sites, especially if they're using a shared or common login platform like OpenId/OpenAuth.
In what way?
Groupon has a clever model but their valuation is precarious because it's easily copied. If anything I would say it is already past its peak.
Not only are there the restaurant/teeth whitening/facial generalist competitors (many of them backed by newspapers that already have sales teams and business relationships), I've been seeing a lot of niche competitors appear as well, which really makes sense. The web is naturally distributed so there's no added barrier participating in multiple sites, especially if they're using a shared or common login platform like OpenId/OpenAuth.
The launch of boutiques.com and now this (if true) would suggest that Google are moving into the commodity-based affiliate marketing space. Rather than relying so heavily on selling ad-space in their products, perhaps they are looking to further diversify their revenue streams by acting as a 'portal' through which a significant proportion of internet users find and purchase commodities from online retailers. It would certainly be very profitable.
There's nothing proprietary about Groupon, only a large volume of sale people on the ground.
If this aquisition is true, the number 2 & 3 in the sector can attract other buyers (namely YHOO). Just out-pace Groupon in your own demographic or stay within distance and you will probably attract top dollar.
But I can't see where Groupon currently fits with Google though. Maybe they are seeing declines in local Adwords spending?
If this aquisition is true, the number 2 & 3 in the sector can attract other buyers (namely YHOO). Just out-pace Groupon in your own demographic or stay within distance and you will probably attract top dollar.
But I can't see where Groupon currently fits with Google though. Maybe they are seeing declines in local Adwords spending?
the thing that bothers me about this is that google is a product company, not a services company. groupon is a service. a service that takes 2400 (and counting) employees to pull off. the entire business model does not seem to be a good fit for google. that said, i could see some really slick integration with google's local products like places, maps, and now hotpot.
This sounds like something outside of Google's sphere of competence. If it's true, it'll be interesting to see how it plays out.
If this is Google entering the deal space then look out Gilt... some people might want to purchase you too
anyone got a better source?
The rumor has been swirling for about 10 days.
http://news.google.com/news/story?pz=1&cf=all&ned=us...
It's not a source, but enough outlets have been reporting this story for enough days that it seems a good bet the two are at least talking.
http://news.google.com/news/story?pz=1&cf=all&ned=us...
It's not a source, but enough outlets have been reporting this story for enough days that it seems a good bet the two are at least talking.
its a waiting game now.
yelp, watch out.
please no
I'm a little skeptical on the longevity of the profits but it's smart to sell while the momentum is red hot, if this actually did happen.