Google buys Groupon for $2.5 billion

[LightHouse]

Lol google needs groupon more than groupon needs google. thus why i posted this info is not correct in the second post here.

This story came out last week, it explains a little more on groupons side.

https://www.thefastlaneforum.com/in...769-hey-google-groupon-just-not-into-you.html

 

[TaxGuy]

Shh Terence, don't give away your secrets to your competitor

BTW, now that I'm down in Phoenix, I'd be really interested in checking out your operation or atleast getting together for coffee or snacks.

 

[Anon3587x]

Maybe its a brilliant PR move?

Both companies are getting major exposure over this.

No one I know even knows what Groupon is.

 

[Anon3587x]

One thing I'd like to add.

By saving people money you can effectively make them money. Something I always keep in mind.

Everybody involved in transactions with Groupon makes money.

The customer saves, advertiser gets business and groupon gets their cut.

In my opinion if your business's value is providing money to all involved you have a solid shot at success. Who doesn't like a business that makes them money?

 

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[Russ H]

One thing I'd like to add.

By saving people money you can effectively make them money. Something I always keep in mind.

Everybody involved in transactions with Groupon makes money.

The customer saves, advertiser gets business and groupon gets their cut.

In my opinion if your business's value is providing money to all involved you have a solid shot at success. Who doesn't like a business that makes them money?

That's not essentially true.

GROUPON makes money for sure.

The customer/buyer saves money.

But the business? They wind up selling something that they have, say, a 20% profit margin on for WAY below their cost.

If they can get a regular customer out of it, it's worth it (like a bagel shop giving out free bagels to get people hooked on them).

But that's not what's happening in a lot of cases. The buyers are not always loyal. Or they just don't buy something like this every day or week (one example: The Napa Wine Train, who did a GROUPON earlier this year. How many people are going to take the Wine Train 4-5x a year? Not many).

Still, the Wine Train did it to make more people aware of their existence. And perhaps to fill up seats during a slow time of year? (I don't know about this).

In any case, the current GROUPON model is all about offering a crazy cheap discount (up to 90% off) on only one day. And hundreds or even thousands of people buy into it.

You just need a product or service that has repeat customers-- something they will come back for-- AND PAY RETAIL PRICE FOR-- again and again and again.

Lotsa businesses have this set up.

And a lot don't.

-Russ H.

 

[Russ H]

No one I know even knows what Groupon is.

That's b/c you're not in one of the major cities that GROUPON serves, right?

It's a big deal around here. Everyone in our area has heard about it, this year.

-Russ H.

 

[Russ H]

From my perspective, If I am the creator of Groupon, I would NOT sell to Google.

Here are my reasons.

1. Groupon knows their system has a huge problem. There is no loyalty in their original one deal a day a city model. Most people don't come back to the same place twice. They also knows business advertise on their site don't really make much profit, since Groupon took 50% commission.
   
   Groupon is opening their door.
   
   So now, Groupon is adding new features to other small businesses that can't afford 50% off and charge less commission. This is bigger than $6B. It could be $60B.
   
2. Local business now have a new way to advertise without using Google AdWords. This is a big threat to Google's revenue.
   
3. Once they go IPO, they could potential get more funding from everyone not just Google.
   
4. There is lots space for Groupon to improve their revenue model.
   
5. As an entrepreneur, it's not about money at this stage. It's about how far it can go.

So what have we learned from Groupon?
1. Groupon is not the first one doing social buying and group buying, but they sees the opportunities and captured them.
2. Groupon constantly improve their system and take action to keep distance from their competitors.
3. Create your own economy and demand regardless the outside noise.

So what can we do about it?
In stead of envy their success and the number, we have the chance to do something better than Groupon and their competitors did. There is always space for small fish to grow big.

I would rather be the one that everyone is talking about 2 years later than talk about then for the next two years.

Find the better solution and execute it.

Terrance-

Truly, this is a brilliant post.

TONS of insight.

Makes the google interest much more clear (ie, that future moves will compete w/Google adwords).

Great analysis. I never even saw it.

Rep speed. + + +

-Russ H.

 

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[Anon3587x]

That's b/c you're not in one of the major cities that GROUPON serves, right?

It's a big deal around here. Everyone in our area has heard about it, this year.

-Russ H.

I am not in any of those cities but within 80 miles of like 6. That could very well be why nobody talks about it in my social circles. I only know of groupon because of this forum.

Groupon only gets their cut if the quota is made right?

I read that a fair share of people who buy these Groupon coupons don't even use them.

But the business? They wind up selling something that they have, say, a 20% profit margin on for WAY below their cost.

This is worse case scenario Russ lol .I do agree this concept is still worth taking into consideration when observing their business model.

I'm actually glad you brought that to my attention. You just provided me with solid evidence that if 2 people involved in the business triangle are making money; the 3rd will take a sacrifice and the system can still be widely successful.

I'm more interested in creating the system than either or.

 

[Guest3722A]

Same here out in the midwest, never heard of them. And from what this thread is leading me to think about what their business model is, it kinda seems to be a facebook wanna be but coupled with an advanced model of the early day priceline discount twist. And we all know what happened there.

It doesnt seem strong to me. I'll bet it'll be a sizzle then a fizzle.

They should have tried to restructure the deal with google.

 

[Anon3587x]

One of the main problems with Groupon is the lack of loyalty their users have.

There is no real sense of "community" there.

How do you create a sense of community on a site like that?

 

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[TOLDUSO]

One of the main problems with Groupon is the lack of loyalty their users have.

There is no real sense of "community" there.

How do you create a sense of community on a site like that?

Important, indeed. That's kind of what "Oodle" tries to capitalize on by being integrated into facebook.

 

[CommonCents]

Although Groupon has room to grow as it is an early leader and getting recognition, but then what? There is nothing sticky about it. The value is collecting info on users and making the coupons relevant to each individual. If they keep sending me spa/salon offers I'm going to quit. At this moment there are probably thousands of groupon clones being set up.

One of the best positioned players would be yellow pages groups. They obviously have major database of businesses that advertise listings. They'd be smart to do a JV with facebook or google to marry businesses with consumers.

I see this coupon market fragment according to specific tastes CarPon for auto enthusiasts etc... The exception would be if groupon can become very specifically relevant to the user.

the other opportunity is a coupon aggregator site that lets you subscribe to many coupon offer sites with one log in. I don't want to have multiple coupon offers hit my email daily. Something like a travelocity did for getting flights on multiple airlines.

 

[TaxGuy]

Important, indeed. That's kind of what "Oodle" tries to capitalize on by being integrated into facebook.

Oodle is complete garbage, see my post on how their customer service SUCKS!

Not sure if Groupon's customer service is any better, but from experience the founder of Oodle must've not only read the Four Hour Work Week, but took the part about not handling customer service literally!

 

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[TOLDUSO]

Oodle is complete garbage, see my post on how their customer service SUCKS!

Not sure if Groupon's customer service is any better, but from experience the founder of Oodle must've not only read the Four Hour Work Week, but took the part about not handling customer service literally!

Yeah, I saw your thread. It sucks that good old customer service has gone downhill from the way things ought to be. Now, 9 times out of 10, I just start pressing 0 when I call a cust svc. line so that I can talk to a human being. Then, I just cross my fingers that the human being I get put through to knows English and is going to do something more for me than put in a trouble ticket and "get back to" me.

I was just mentioning that it's part of their (oodle's) marketing to be "social."

I've, personally, never used oodle or groupon, although my wife got some tickets for a tour once through groupon when family was visiting here in New Orleans.

 

[TaxGuy]

UPDATE- looks like I might have to update my thread/blog post. They sent me a pretty nice apology email and re-activated my account

Not sure if it was a "squeaky wheel get the oil" situation or they have changed their approach since my last attempt to use their service back in March.