4 ms·

I would say strongly, yes, they are making a $6B mistake. I'd say it is tantamount to Yahoo acquiring Geocities in 1999. Groupon will never become a juggernaut

I would say strongly, yes, they are making a $6B mistake. I'd say it is tantamount to Yahoo acquiring Geocities in 1999. Groupon will never become a juggernaut site the size of Facebook or Craigslist. It's niche and a novelty, not any kind paradigm shift in online marketing that so many in SV seem to think it is.

patio11 16y ago
Craiglist is perhaps not the first example I would go to if I needed to discount Groupon's hundreds of millions of revenue.
- rbarooah 16y ago
  Craigslist's revenue is estimated at >$100m, and is mostly that low out of choice. Also, Google buys reach and influence as much as revenues with their investments (e.g. Android, YouTube)
lwhi 16y ago
I disagree - I think Groupon represents a paradigm shift. Thinking about the problem that the site solves: 1 - It's changing the concept of advertising; In contrast to traditional advertising, people actually want to receive these deals from unsolicited companies. It's 'solicited spam' - and works because most people love a bargain. 2 - It's changing the concept of sales conversion; People are parting with some of their cash immediately. Because of this companies are much more likely to achieve conversion to full customers. Even if users don't redeem their deals (which is likely in some circumstances) the client companies are still making money. 3 - It's changing the nature of sales; Because Groupon offers financial incentives to users to get others to purchase deals. The entire user base of Groupon become a proxy-sales team on behalf of Groupon's client companies. I think the issue of sustainability / scalability (in terms of companies offering deals through Groupon) is largely moot. Groupon provides a bump to sales and marketing - and I therefore think Groupon will remain useful in the arsenal of marketing tools available to any company.

patio11 16y ago

Craiglist is perhaps not the first example I would go to if I needed to discount Groupon's hundreds of millions of revenue.

rbarooah 16y ago
Craigslist's revenue is estimated at >$100m, and is mostly that low out of choice. Also, Google buys reach and influence as much as revenues with their investments (e.g. Android, YouTube)

lwhi 16y ago

I disagree - I think Groupon represents a paradigm shift. Thinking about the problem that the site solves: 1 - It's changing the concept of advertising; In contrast to traditional advertising, people actually want to receive these deals from unsolicited companies. It's 'solicited spam' - and works because most people love a bargain. 2 - It's changing the concept of sales conversion; People are parting with some of their cash immediately. Because of this companies are much more likely to achieve conversion to full customers. Even if users don't redeem their deals (which is likely in some circumstances) the client companies are still making money. 3 - It's changing the nature of sales; Because Groupon offers financial incentives to users to get others to purchase deals. The entire user base of Groupon become a proxy-sales team on behalf of Groupon's client companies. I think the issue of sustainability / scalability (in terms of companies offering deals through Groupon) is largely moot. Groupon provides a bump to sales and marketing - and I therefore think Groupon will remain useful in the arsenal of marketing tools available to any company.