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Google Buys Groupon for $2.5 Billion?
- spicyj 16y agoSomehow the question mark got lost in your submission title.
- Mistone 16y agoedited, thanks.
- jlgosse 16y agoHow 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.
- deleted 16y ago[deleted]
- d2viant 16y agoInteresting 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-that-monster-groupon-financing/ http://techcrunch.com/2010/04/15/the-rest-of-the-details-on-...
- melvinram 16y agoIt's a wonderful business model. Sell other people's services and goods for half off and keep half of the sales. Yea, I'm a little jealous. 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.
- phillian 16y agoVia 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.
- deleted 16y ago[deleted]
- bobf 16y agoIs "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?
- coryl 16y agoI 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?
- Ataraxy 16y agoI would venture a guess and say that this integrates beautifully into their local advertising offerings.
- zaidf 16y agoGoogle's long struggled to break into local. At 2.5B, Groupon's going to look like an even bigger steal than YouTube.
- dshah 16y agoOn 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).
- zaidf 16y agoFair 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.
- seanalltogether 16y agoPossibly 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.
- 16y ago
- te_chris 16y agoanyone got a better source?
- RtodaAV 16y agoits a waiting game now.
- portman 16y agoThe rumor has been swirling for about 10 days. http://news.google.com/news/story?pz=1&cf=all&ned=us&hl=en&ncl=dMt5ygFQolEGAtMvk3a-ykPKlFnaM 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.
- BadiPod 16y agoThe 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?
- il 16y agoIt'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.
- InfinityX0 16y agoBrand name. If Wasabi has taught us anything, it's that brand name is the only thing that matters for a company.
- Mistone 16y agoIs 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.
- shashashasha 16y agoAnd that it's Wesabe makes that point even more :)
- melvinram 16y agoPurely 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.
- flipp 16y agoplease no
- netcan 16y agoThis sounds like something outside of Google's sphere of competence. If it's true, it'll be interesting to see how it plays out.
- HelotRevolt 16y agoThe 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.
- ghshephard 16y agoIs it just me, or does this read like Steve Gillmor?
- deleted 16y ago[deleted]
- hugh3 16y agoI don't know who that is. I don't know who D-Wade is either. Though I think LeBron might be a basketball player.
- zackattack 16y agoUm, you're neglecting that the Heat have a 9-8 record that includes some very embarrassing losses.
- faramarz 16y agoThere'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?
- pjy04 16y agoIf this is Google entering the deal space then look out Gilt... some people might want to purchase you too
- sahaj 16y agoyelp, watch out.
- necolas 16y agoThe 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.
- mgkimsal 16y agoLet'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.
- melvinram 16y agoGrandCentral came out as Google Voice, which I love and use daily. It has a nice interface and I'd say that it has been integrated remarkably well so far.
- mgkimsal 16y agoYeah, and it took years between the acquisition and before they let anyone new get an account.
- ditojim 16y agoEtherpad is making its way into Google Docs... of the 3 you mentioned, only Dodgeball was neglected.
- mgkimsal 16y agoEtherpad'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.
- ditojim 16y agothe 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.
- trotsky 16y agoI'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.
- gallerytungsten 16y agoI 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.
- ergo98 16y agoI 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.