Groupon Sales Team Files Class-Action Suit(paidcontent.org)
paidcontent.org
Groupon Sales Team Files Class-Action Suit
http://paidcontent.org/article/419-more-bad-news-for-groupon-sales-team-files-class-action-suit/
71 comments
I upvoted your comment, but I still think you might be wrong.
The journalist may be sensationalizing here, but a high-growth, pre-IPO start-up that is contracting, before it begins to exploit profits, is in trouble.
Whether it's the market or the company that is in trouble, or a mixture of the two, is debatable. But I do think "suddenly unpopular" conveys the gist of the story better than "contracting from its previous peak." The first tells me something is wrong in Groupon world (and there probably is), and the second tries to convince me the whole thing is a non-story.
The journalist may be sensationalizing here, but a high-growth, pre-IPO start-up that is contracting, before it begins to exploit profits, is in trouble.
Whether it's the market or the company that is in trouble, or a mixture of the two, is debatable. But I do think "suddenly unpopular" conveys the gist of the story better than "contracting from its previous peak." The first tells me something is wrong in Groupon world (and there probably is), and the second tries to convince me the whole thing is a non-story.
I think the word "unpopular," in the context of the article, is referring to people's perceptions of the company's business practices and brand. Not so much to the size or engagement of the userbase. I might be wrong, but that was my interpretation.
(It's "unpopular" right now because it's come under a lot of heat in the press; perhaps "embattled" would be a more accurate word).
(It's "unpopular" right now because it's come under a lot of heat in the press; perhaps "embattled" would be a more accurate word).
And neither would be accurate. Most users, both businesses and customers, are wildly happy with group on.
Citations, please.
Without knowledge about their churn rates, especially in comparison with their competitors, it is not obvious either way. There are also users who still receive the daily emails because they did not bother to cancel the subscription, but rarely look at them.
Without knowledge about their churn rates, especially in comparison with their competitors, it is not obvious either way. There are also users who still receive the daily emails because they did not bother to cancel the subscription, but rarely look at them.
I like Taleb, but I think you've misinterpreted him. High-frequency measurements of a random variable will reveal more about the probability distribution than will infrequent measurements. As far as I know financial time-series are scale-invariant. While infrequent measurement may take advantage of the law of large numbers in identifying the mean, frequent measurement will allow observation of both the mean and the variance of the distribution.
This had to be sort of expected. Groupon has grown fast and they turned down the acquisition offer from Google. This suggests that they were messaging new employees "We're taking this one all the way to IPO." And then proceed to ply new employees with stock and spreadsheets showing great returns. Many people at a 'startup' understand that they are sacrificing a bit of pay or benefits now, for a potentially much larger upside later. And Groupon certainly fit the mold.
Now Groupon pulls back on their IPO plans, folks who had been "taking one for the company" feel cheated because they have a harder time imagining huge returns than they did before. (On a related note I've had this issue with calling options and stock 'compensation' in the past because really until someone buys your paper it really isn't something you can spend) So the sales folks turn around and say well if we're not going to get that money we foolishly believed would be dripping out of the IPO spigot, they're going to ask for it in cash.
I really wonder if they would have crossed this threshold (suing) if the 'big cheeses' in the company hadn't decided to do a huge funding round to pay themselves off. (another way to convert 'potential' in earnings into cash).
Now Groupon pulls back on their IPO plans, folks who had been "taking one for the company" feel cheated because they have a harder time imagining huge returns than they did before. (On a related note I've had this issue with calling options and stock 'compensation' in the past because really until someone buys your paper it really isn't something you can spend) So the sales folks turn around and say well if we're not going to get that money we foolishly believed would be dripping out of the IPO spigot, they're going to ask for it in cash.
I really wonder if they would have crossed this threshold (suing) if the 'big cheeses' in the company hadn't decided to do a huge funding round to pay themselves off. (another way to convert 'potential' in earnings into cash).
Completely misleading title - it should read 'Groupon Salesperson Files Class-Action Suit'. You only need one person to file a lawsuit, class-action or otherwise, and there's no indication in any of the docs that any other members of Groupon's sales team are involved.
From the filing (in Justia - http://docs.justia.com/cases/federal/district-courts/illinoi...) it looks to my completely-not-an-expert-eyes like Groupon's mistake here was not treating its salaried employees like salaried employees - on rare occasions it gave them overtime pay, and on the attached pay stub hours and an hourly rate ($15.62) are clearly recorded. Whoops.
From the filing (in Justia - http://docs.justia.com/cases/federal/district-courts/illinoi...) it looks to my completely-not-an-expert-eyes like Groupon's mistake here was not treating its salaried employees like salaried employees - on rare occasions it gave them overtime pay, and on the attached pay stub hours and an hourly rate ($15.62) are clearly recorded. Whoops.
If that's true, it's a pretty common error. Most tech companies operate under the (usually valid) assumption that their employees are all salaried and exempt from OT comp. But it's usually to the benefit of all those employees to be classified "hourly", and theres a bunch of innocuous things employers can do to make that happen.
More common than breaking people's status with overtime payments: threatening to dock pay for coming in late or missing days.
More common than breaking people's status with overtime payments: threatening to dock pay for coming in late or missing days.
California, a few years ago, cracked down on this. Entry level programmers are not exempt. I think because they lack responsibility or skill or somesuch. I found this out only when I had to start filling out time sheets. I became exempt again after a raise, apparently there's some salary floor at which point they assume you have to have responsibility because you're paid too much not to.
FWIW, CA appears to exempt outside sales but not inside sales, so probably all groupon salespeople in CA have a case.
FWIW, CA appears to exempt outside sales but not inside sales, so probably all groupon salespeople in CA have a case.
This is shocking to me. Are you sure? Being non-exempt is a big deal. And it cuts both ways: it also means your employer can dock you when you show up late. Are you sure about this? Are junior devs literally punching timecards?
Certainly I was literally filling in boxes on physical paper with a physical pen, but there was no giant steam whistle involved. California has revved the laws a few times, and I'm not an employment lawyer, but all I know is I worked two weeks on salary before I was told there'd been a mistake. That was 2004, not long after CA went around to a bunch of businesses and explained that "college degree === exempt professional" was no longer going to be the order of the day. Made me happy, it meant more money. The hours were as flexible as ever.
Yes: http://www.paymeovertime.com/overtime-pay.php. The law changed sometime around the end of the .com bubble.
"This is why every computer and IT employee who is classified as exempt, should speak to a California labor law attorney to review their employment matter."
Gag.
Gag.
> Gag.
I can't tell if you're objecting to the law or the messenger. The site is obviously trying to drum up business, but their advertizing tactics aren't really germane.
I can't tell if you're objecting to the law or the messenger. The site is obviously trying to drum up business, but their advertizing tactics aren't really germane.
I think this is it:
http://www.management-advantage.com/products/overtime-exempt...
1. "Minimum Salary Test" The minimum salary level for exempt white collar employees according to A.B. 60 is "no less than two times the state minimum wage for full time employment." "White collar" exemptions refer to the executive, administrative, learned professional, creative professional, computer employee, and outside sales exemptions specified in the Fair Labor Standards Act (FLSA) as amended effective 8/23/2004. Computing the California minimum salary level for January 2009 we do the following: Current minimum wage = $8.00 per hour X 2,080 hours in a year = $16,640, multiplied by 2 times the minimum wage = $33,280
http://www.management-advantage.com/products/overtime-exempt...
1. "Minimum Salary Test" The minimum salary level for exempt white collar employees according to A.B. 60 is "no less than two times the state minimum wage for full time employment." "White collar" exemptions refer to the executive, administrative, learned professional, creative professional, computer employee, and outside sales exemptions specified in the Fair Labor Standards Act (FLSA) as amended effective 8/23/2004. Computing the California minimum salary level for January 2009 we do the following: Current minimum wage = $8.00 per hour X 2,080 hours in a year = $16,640, multiplied by 2 times the minimum wage = $33,280
You must already be exempt for that test to apply. It doesn't mean anyone making $16/hr becomes exempt.
So that seems to boil down to: interns are non-exempt.
> In a filing in Chicago federal court this week, former salesperson Ranita Dailey confirmed she will be lead plaintiff on behalf of Groupon employees who seek to recoup overtime that the company allegedly failed to pay.
Just because she's the lead plantiff doesn't mean the others aren't involved.
Just because she's the lead plantiff doesn't mean the others aren't involved.
(i) Sales staff are usually salaried exempt. I would be interested in a specific counterexample (ie, "inside sales at Airbnb is non-exempt!").
(ii) As a result, OT compensation for sales staff is usually zero.
(iii) This filing claims Groupon paid OT comp in the past. That was probably dumb. They don't have to.
(iv) By doing that, they created a basis for sales staff to argue that they were in fact non-exempt. But see (i): the expectation among sales professionals is that they are exempt.
(v) The other specific complaint in this filing is that Groupon didn't include commissions (variable comp) in the calculation for time-and-a-half overtime. In other words, they paid time-and-a-half overtime, which (see (iii)) they didn't need to do, but didn't do it to someone's satisfaction.
How legit does this case seem to you? It looks like a gotcha case over FLSA status. You think the whole sales team signed on for that?
I'm not saying they're going to lose (it'll probably settle out). But does the core issue in here really seem legit to you? It doesn't to me.
(ii) As a result, OT compensation for sales staff is usually zero.
(iii) This filing claims Groupon paid OT comp in the past. That was probably dumb. They don't have to.
(iv) By doing that, they created a basis for sales staff to argue that they were in fact non-exempt. But see (i): the expectation among sales professionals is that they are exempt.
(v) The other specific complaint in this filing is that Groupon didn't include commissions (variable comp) in the calculation for time-and-a-half overtime. In other words, they paid time-and-a-half overtime, which (see (iii)) they didn't need to do, but didn't do it to someone's satisfaction.
How legit does this case seem to you? It looks like a gotcha case over FLSA status. You think the whole sales team signed on for that?
I'm not saying they're going to lose (it'll probably settle out). But does the core issue in here really seem legit to you? It doesn't to me.
FLSA also isn't a "class action" statute -- it's "collective action." The distinction is that you have to opt-in to be a plaintiff under the FLSA, while most class actions are opt-out.
(i) For CA, see http://www.management-advantage.com/products/overtime-exempt... which is probably clearer than reading the actual laws. Key requirement: "Usually work away from the employer's place of business".
I don't know about the specific statutes in California, but from experience I'm pretty sure most tech inside sales reps are salaried.
Probably because most employees don't know their rights, nor would they be particularly interested in flexing them if they did. Not long ago you might have said that most long term contractors get invited to the company picnic. Not anymore.
I really don't think this is as cut-and-dry as you seem think it is. There's a downside to being non-exempt. And companies can easily avoid paying overtime.
The key phrase, of course, is that sales people are "usually" but not always exempt employees.
Actions speak louder than words, and treating a purported-exempt employee as a non-exempt employee (i.e., compensating them based on hours worked, or docking pay for not working specific hours) is pretty much all you need to do (as an employer) for the employee to be classified as non-exempt. The laws, and especially the NLRB administrative decisions, favor the employees in this regard.
The "expectations" bit doesn't matter in this case, because the specific actions of Groupon make those industry-standard expectations irrelevant. It's about what Groupon did, not what everyone else does.
Once Groupon began treating the sales staff as non-exempt employees, they became non-exempt employees, and Groupon became obligated to compensate them for time-and-a-half overtime.
Based on the facts currently available in the linked article and other sources online, I am saying that Groupon would lose if it gets to a hearing. But chances are better than 99% that they'll settle (or go bankrupt before the case gets anywhere in the court system).
Actions speak louder than words, and treating a purported-exempt employee as a non-exempt employee (i.e., compensating them based on hours worked, or docking pay for not working specific hours) is pretty much all you need to do (as an employer) for the employee to be classified as non-exempt. The laws, and especially the NLRB administrative decisions, favor the employees in this regard.
The "expectations" bit doesn't matter in this case, because the specific actions of Groupon make those industry-standard expectations irrelevant. It's about what Groupon did, not what everyone else does.
Once Groupon began treating the sales staff as non-exempt employees, they became non-exempt employees, and Groupon became obligated to compensate them for time-and-a-half overtime.
Based on the facts currently available in the linked article and other sources online, I am saying that Groupon would lose if it gets to a hearing. But chances are better than 99% that they'll settle (or go bankrupt before the case gets anywhere in the court system).
I don't really have an opinion about any of this. All I'm saying is, if you want to read tea leaves on how much this filing has set the whole Groupon sales force on fire, it's helpful to know that it's taking advantage of a technicality.
A side note - I have been supremely impressed with Groupon's customer service. Emails personally returned within minutes and no problem refunding groupons I no longer wanted.
My experience has been the opposite. Despite the fact that this blog post from Mason...
http://www.groupon.com/blog/cities/groupon-organizes-class-a...
...suggests that Groupon's "completely open return policy" can be used, rather than a lawsuit, to get a refund on an expired Groupon, that's not true. They won't give such refunds, and their customer service responses have advised that the Groupon in question may still be usable "if state law applies". So rather than providing "unbelievable" customer service, or even following through on the refund promises of their CEO, they're doing the absolute minimum required by law.
So in the single interaction where I could independently test whether what Mason touts is true, it was not. As a result, I don't put much weight in anything Groupon claims.
http://www.groupon.com/blog/cities/groupon-organizes-class-a...
...suggests that Groupon's "completely open return policy" can be used, rather than a lawsuit, to get a refund on an expired Groupon, that's not true. They won't give such refunds, and their customer service responses have advised that the Groupon in question may still be usable "if state law applies". So rather than providing "unbelievable" customer service, or even following through on the refund promises of their CEO, they're doing the absolute minimum required by law.
So in the single interaction where I could independently test whether what Mason touts is true, it was not. As a result, I don't put much weight in anything Groupon claims.
Well they just refunded my 4 helicopter ride Groupons for a total of $596 that would have expired next week. If I let a Groupon expire though, I wouldn't bitch about not getting a refund, no matter the state law.
And I would have requested the refund just before expiration... if I'd known the Groupon Promise and the Mason blog post were misleading. (Actually, I probably wouldn't have bought the Groupon in the first place. I bought it right after being impressed with the Mason claim, and thinking, "what a smart policy, it takes all will-I-use-it-or-not anxiety out of buying a Groupon".)
But I trusted them, and was burned. Miniscule amount of money, but now I know that they strategically deceive about the refund policy, so I won't be trusting them again.
I'm OK if a particular business wants to grind out their margins from fine print, 'breakage', and other gotchas. I'm all for caveat emptor. They could change the "Groupon Promise" to read "If your Groupon experience ever lets you down, let us know and we’ll refund your purchase. Period. Except for expirations." And Mason could fix his blog post so that it doesn't portray the 'completely open return policy' as the preferred remedy for people with expired Groupons.
I just hate the act that they've got Nordstrom/Bed-Bath-Beyond/Costco/Zappos/etc-style customer service, when they don't. Together with the other reports of dodgy advertising claims, encouraging businesses to raise their prices pre-Groupon to inflate discount percentages, and pushy sales practices, it gives me the impression that they've ranked 'honesty' far below 'growth at all costs'.
But I trusted them, and was burned. Miniscule amount of money, but now I know that they strategically deceive about the refund policy, so I won't be trusting them again.
I'm OK if a particular business wants to grind out their margins from fine print, 'breakage', and other gotchas. I'm all for caveat emptor. They could change the "Groupon Promise" to read "If your Groupon experience ever lets you down, let us know and we’ll refund your purchase. Period. Except for expirations." And Mason could fix his blog post so that it doesn't portray the 'completely open return policy' as the preferred remedy for people with expired Groupons.
I just hate the act that they've got Nordstrom/Bed-Bath-Beyond/Costco/Zappos/etc-style customer service, when they don't. Together with the other reports of dodgy advertising claims, encouraging businesses to raise their prices pre-Groupon to inflate discount percentages, and pushy sales practices, it gives me the impression that they've ranked 'honesty' far below 'growth at all costs'.
Have you tried redeeming the groupon for the money you paid at the merchant? From Groupon's FAQ:
What happens if my Groupon's promotional value expires?
All is not lost! If your Groupon's promotional value expires, you can always redeem it for the amount paid. For more information about expiration dates and voucher values, read our Terms of Sale
What happens if my Groupon's promotional value expires?
All is not lost! If your Groupon's promotional value expires, you can always redeem it for the amount paid. For more information about expiration dates and voucher values, read our Terms of Sale
Does that get charged to the business or does Groupon cover the loss? I was under the impression that Groupon sells businesses on the fact that a certain percentage of users will never redeem.
As a business featured a few times on Groupon, our merchant contact at Groupon has been ridiculously good. She (hi Emily!) answers emails at all hours of the day. It's part of the reason why I've always rooted for them, their sales team seem to be good, hard working people.
Interesting tidbit from the article that I did not know:
"a federal judge in San Francisco permitted a tour operator to proceed with a merchant class action lawsuit over alleged false advertising"
leads to
http://www.reuters.com/article/2011/08/24/us-groupon-lawsuit...
"a federal judge in San Francisco permitted a tour operator to proceed with a merchant class action lawsuit over alleged false advertising"
leads to
http://www.reuters.com/article/2011/08/24/us-groupon-lawsuit...
To summarize the situation (someone please correct me if I am wrong?):
1. Files for IPO
2. ASCOI (Adjusted Segmented Consolidated Operating Income) falls under scrutiny from public & SEC
3. VP of Global Communications resigns
4. Internal Memo "leaked" to major press outlets
5. SEC investigates said memo
6. Sales Team files Class-Action suit
Wow.
1. Files for IPO
2. ASCOI (Adjusted Segmented Consolidated Operating Income) falls under scrutiny from public & SEC
3. VP of Global Communications resigns
4. Internal Memo "leaked" to major press outlets
5. SEC investigates said memo
6. Sales Team files Class-Action suit
Wow.
I never really understood Groupon's super high valuation. I think they grew too fast, and possibly needed to cut corners to sustain their growth. Can anyone explain what the appeal has been for investors?
"Can anyone explain what the appeal has been for investors?"
The usual shtick about how growth trumps all other considerations. "It's the fastest growing company ever!" "Who cares if COGS is absurdly high / users aren't buying / revenues have been overstated / etc? Fundamentals don't apply when they're growing this quickly!" "This is a winner-take-all market, like with Amazon in the 90s!"
I remember reading endless defenses of Groupon's business model on SeekingAlpha in the months leading up to the IPO filing. People would trot out all sorts of highly sophisticated models and theories to demonstrate how Groupon was pretty much exempt from the laws of thermodynamics. I'm too young to remember if the same pitch was used for the Dotcoms of the '90s bubble, but the logic sounds eerily familiar.
The usual shtick about how growth trumps all other considerations. "It's the fastest growing company ever!" "Who cares if COGS is absurdly high / users aren't buying / revenues have been overstated / etc? Fundamentals don't apply when they're growing this quickly!" "This is a winner-take-all market, like with Amazon in the 90s!"
I remember reading endless defenses of Groupon's business model on SeekingAlpha in the months leading up to the IPO filing. People would trot out all sorts of highly sophisticated models and theories to demonstrate how Groupon was pretty much exempt from the laws of thermodynamics. I'm too young to remember if the same pitch was used for the Dotcoms of the '90s bubble, but the logic sounds eerily familiar.
"This is a winner-take-all market, like with Amazon in the 90s!"
Amazon is often pointed to as a company that was doubted much and then succeeded. What isn't talked about as much, in addition to the fact that there were many more companies that went bust than hit, is the fact that Amazon lost 3 billion before it became profitable. (Source: financials on Amazon investor site). The fact is Amazon should have failed and the critics were right more than they were wrong.
"I'm too young to remember if the same pitch was used for the Dotcoms of the '90s bubble"
Same idea. Making people think they are stupid if they don't "get it". I know otherwise smart people who lost $100,000 on dot com stocks that they had no business in back then.
Amazon is often pointed to as a company that was doubted much and then succeeded. What isn't talked about as much, in addition to the fact that there were many more companies that went bust than hit, is the fact that Amazon lost 3 billion before it became profitable. (Source: financials on Amazon investor site). The fact is Amazon should have failed and the critics were right more than they were wrong.
"I'm too young to remember if the same pitch was used for the Dotcoms of the '90s bubble"
Same idea. Making people think they are stupid if they don't "get it". I know otherwise smart people who lost $100,000 on dot com stocks that they had no business in back then.
> Amazon lost 3 billion before it became profitable
Where exactly did they find 3 billion to lose? How did Jeff Bezos manage to convince investors to give up so much cash? I'm really surprised about this
Where exactly did they find 3 billion to lose? How did Jeff Bezos manage to convince investors to give up so much cash? I'm really surprised about this
Taking only 1 year as an example, 2001 Amazon had $444 million of accounts payable, $305 million of current liabilities (some other things...) and 2.1 billion of long term debt.
So, in 2001 the total current liabilities and ltd was over 3 billion dollars.
So they borrowed - they issued bonds as well as used other types financing. The interest payments for that year are actually pretty low in relation to the debt, interest expense for 2001 was only about 139 million.
So, in 2001 the total current liabilities and ltd was over 3 billion dollars.
So they borrowed - they issued bonds as well as used other types financing. The interest payments for that year are actually pretty low in relation to the debt, interest expense for 2001 was only about 139 million.
"How did Jeff Bezos manage to convince investors"
With people investors or not
a) consistency principle - people not wanting to be proven wrong (so they will throw good money after bad)
b) sure failure if they don't give more money so they take a chance and throw good money after bad.
c) people issuing the debt make money on the deal so they have incentive to push and not as much if a failure.
With people investors or not
a) consistency principle - people not wanting to be proven wrong (so they will throw good money after bad)
b) sure failure if they don't give more money so they take a chance and throw good money after bad.
c) people issuing the debt make money on the deal so they have incentive to push and not as much if a failure.
But there was also other shtick...
"They've solved a problem that no one else was able to solve ... how to go that last mile to the merchant"
And
"They've assembled a team like no one else [implication they can pivot if necessary]"
And
"Anything done by [supposed-superstar-manager] is worth a lot"
And naturally, all this was wrong-headed. The retail sector as a generic is pushed to the boards in this economy. The idea that you can squeeze excess capacity for profits is simply false given that no industry has ever attained economies of scale without building for it from the ground-up. Blood? Stone? You cannot squeeze...
TL;DR; You could say Groupon was built on looking at plans that worked for sky diving businesses and pretending they'd apply to restaurants.
"They've solved a problem that no one else was able to solve ... how to go that last mile to the merchant"
And
"They've assembled a team like no one else [implication they can pivot if necessary]"
And
"Anything done by [supposed-superstar-manager] is worth a lot"
And naturally, all this was wrong-headed. The retail sector as a generic is pushed to the boards in this economy. The idea that you can squeeze excess capacity for profits is simply false given that no industry has ever attained economies of scale without building for it from the ground-up. Blood? Stone? You cannot squeeze...
TL;DR; You could say Groupon was built on looking at plans that worked for sky diving businesses and pretending they'd apply to restaurants.
[deleted]
My take is that the appeal to investors has been to 'ride the wave' and make sure not to be the last one holding the bag.
Me neither. They are in a commodity market with a low barrier to entry. They had dozens of other competitors, but had no secret sauce nor was Groupon any better than them. Even a basic Twitter search for deals is better than Groupon--nevermind paper coupons. The CEO should've taken the Google offer and run with the money. I don't understand why investors were gaga over it.
I see Groupon's rise and fall as similar to MySpace. traffic for rival deal site Living Social rose 27% Maybe Living Social is the Facebook in this comparison.
In my world it definitely is. They are MUCH more local for those of us living in the city (Denver in this case) than Groupon which typically has deals that are 20 miles from my house.
For me and my social circle, Living Social is something we consistently use. Most people I know have actually unsubscribed from Groupons mailing list.
Anecdotal for sure, but I think there might be at least a kernel of trend in there somewhere:)
For me and my social circle, Living Social is something we consistently use. Most people I know have actually unsubscribed from Groupons mailing list.
Anecdotal for sure, but I think there might be at least a kernel of trend in there somewhere:)
This brings up an interesting point. Perhaps hyper-locality (ie, zipcode or even neighborhood granualar offers) is the full-paradigm shift that will revolutionize this Groupon concept.
Social sizzle like what LivingSocial adds I think is nice, but forgettable (no one I know has gotten/used the "free deal" group buy).
Social sizzle like what LivingSocial adds I think is nice, but forgettable (no one I know has gotten/used the "free deal" group buy).
I would recommend to groupon instead of forcing businesses to give deals. Set up a system that has the users bid to spend a certain amount for a good or service. Once you have enough people agreeing to it, there's no way a business would turn it down. You could cut the work force in half and let the users have control of where they get deals. That's my 2 cents.
This is really sad. In my limited understanding of business, I always thought that Groupon's greatest asset was it's sales team. Who else has a sales team that can hit so many small businesses across the us so fast. I was hoping that they would leverage this asset in more ways than just selling advertisement.
They should have taken that google offer.
I wonder if they couldn't, what if Google took the offer back after they saw their financials.
I'd wager it was something in that neighborhood. Either google withdrew the offer or groupon knew that google would not go ahead with the offer after seeing their financials and hence decided to decline it. The offer however made them seem really hot though. Hey, if google wants them why shouldn't we regular folks?
too bad it only lasted one day...
Poor business fundamentals create poor business outcomes. Groupon needs to reevaluate itself, and if it must, downsize and regrow with a better product. Basically, Groupon needs to figure this out - or everyone else will - and it won't be good for Groupon.
The turning point for Groupon was that awful, offensive Superbowl advertisment.
a boom needs a webvan
Almost starting to feel bad for Groupon - what else could possibly go wrong? The only thing that seems left is insolvency.
There has GOT to be a great case study there once all the dust/ashes settle.
"How To Almost Go Public By Making 50 cents for every $1 spent." - HBS Case (2012)
... or "When Google offers you $6B, take it."
Pigs get fat. Hogs get slaughtered.
Pigs get fat. Hogs get slaughtered.
They were pigs, not hogs. The original investors walked away with a majority of the final round of funding. I don't think Google's $6bn offer would have allowed them to do that. The people left holding this junk are now trying to pawn it off on the public...
[deleted]
Shit meet fan.
The first rule of bad journalism is to confuse the first and second derivatives. Groupon is enormously popular with users and investors--it's just not the most popular it's ever been. Yipit's fairly recent data indicate that while the daily deal market contracted slightly over the summer, but Groupon shrank more slowly than LivingSocial ( http://techcrunch.com/2011/08/25/yipits-daily-deal-report-gr... ).
In "Fooled by Randomness," Taleb points out that the more frequently you measure results, the more random they are. Second-by-second, Warren Buffett is losing money just about half the time.
Groupon obviously has problems, and LivingSocial is executing amazingly well, but it should be laughable to call them "unpopular" rather than "less massively popular than at their peak a couple months ago," in the same way that you wouldn't call someone "poor" because they moved down a spot in the Forbes 400.