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Whoa... Groupon Generated $760M in Revenue in 2010
- juiceandjuice 16y agoIsn't that about half of what facebook brought in?
- Tyrant505 16y agoI know! Seems like they're doing a lot better right?
- piguy314 16y agoFacebook had revenues of 1.86 billion in 2010 with an estimated valuation of 70 billion, while groupon had revenues of 760 million with an estimated valuation of 15 billion. That results in a Price-Earnings ratio of ~37 for Facebook and ~20 for groupon. PE is often difficult to interpret but basically it means groupon is undervalued compared to facebook and would be a better buy if it were traded on the open market.
- imkevingao 16y agoFacebook is probably going to bring in a lot more this year with Facebook Credit and Facebook Place. Although the revenue is high, the expense for Groupon is probably high as well, after all it's not cheap to launch that many commercials during the Superbowl, and have ads at every other corner on mainstream websites. At least they have income.
- ajg1977 16y ago~4000 employees generating revenue of 760m, which vendors get a big chunk of, doesn't seem super impressive. I mean it's a nice amount of income, but it doesn't seem very 'whoa..'.
- chaz 16y ago23x the prior year's earnings, more than a third coming from overseas, and founded in 2008? Sounds pretty impressive to me.
- olivercameron 16y agoWith nearly $1 billion in funding, it'd be very disappointing to not be generating revenue at a very high level.
- chaz 16y agoAssuming the rumors were true, they could have been bought for $6bn in November by Google on ~$750mm 2010 revenue after three rounds totaling $171mm -- an outstanding return. However, they chose to turn down the offer, and take on fourth round of nearly $1bn in Dec/Jan and (presumably) grow internationally. It's a bet by the board that they can grab land faster than anyone else.
- dshankar 16y agoCheck your facts. They turned $166M in funding (as of Dec 2010) into $760M in revenue for 2010. How the hell is $1B in funding in Jan 2011 going to retroactively affect revenue in 2010??
- olivercameron 16y agoAll I am saying is that if investors are willing to invest $1 billion, the company should be pulling in pretty high revenues, regardless of the time they raised the money. Jeez.
- portman 16y agoAlso, a large percentage of that was secondary, meaning it went to existing shareholders. So the actual primary funding was much less. Edit: Hypothetical numbers for illustration purposes only: A invests $100M in company. B purchases half of A's shares for $200M. C purchases half of B's shares for $300M. D purchases remaining A shares for $400M. So although they have "raised" $1B, the only amount that has been invested in the company is $100M.
- DevX101 16y agoHow's your company doing?
- vaksel 16y agoback of napkin math: 50% goes to vendors, so that's down to 380mm 4,000 employees at average of $50K, comes out to 200mm 180mm remaining...they advertise pretty aggressively, so let's say they spend 100mm on ads(probably less). Which still leaves them with 80mm in profit
- iisbum 16y agoI know it's back of the napkin accounting, but lets not forget all the other operational costs? - Credit card processing on all transactions (3%?) - Office space for 4000 employees - Taxes - etc Would take another huge chunk out of that 80mm
- chaz 16y agoMy favorite part was his note to the troops: "By this time next year, we will either be on our way to becoming one of the great technology brands that define our generation, or a cool idea by people who were out executed and out innovated by others that were smarter and harder working." The original WSJ article: http://online.wsj.com/article/SB10001424052748703408604576164641411042376.html#ixzz1F31cLWvf http://online.wsj.com/article/SB1000142405274870340860457616...
- olivercameron 16y agoDoes Groupon count the 50% that is owed to the vendors in their revenue? If so, it doesn't feel all that impressive. I'd be more curious to see how much profit was made.
- alanfalcon 16y agoYes, that is considered Revenue.
- allantyoung 16y agoNo, it shouldn't count as revenue. The money owed to merchants is considered a liability and is probably treated as Accounts Payable.
- piguy314 16y agoRevenue is income before expenses, you are probably thinking of net income.
- ahalam 16y agoAgreed. It shouldn't be counted as revenue. It is such misleading reporting that leads to over valuation and bubbles.
- michael_dorfman 16y agoOf course it is revenue. Think about retail for a moment. The amount of money a retailer takes in is revenue. The fact that he needs to pay a wholesaler for the items sold doesn't change that fact. If the money is being paid to Groupon, it's revenue.
- _delirium 16y agoIn transactional / middle-men businesses, it's more standard to only report your percent take as "revenue", rather than including pass-through dollars (e.g. PayPal only reports their fees as revenue, not all dollars that flow through PayPal). But I suppose it's unclear if Groupon is that kind of business; arguably they could be more like a retailer, where it is standard to include all dollars flowing through as revenue.
- worldtize 16y agoI would of take the 6 billion from google and went to dubai to join the prince and built an island in the shape of a giant coupon. With such a huge work force they need to just about monopolize the coupon game before they start committing suicide for not selling.
- jc123 16y agoIf true, that's double the previous speculation that they were making $1MM a day (revenue).
- lkozma 16y agoA bit off-topic, but I don't really get Groupon. I looked at it for my region about 5 times and in each case the offer seemed to be way overpriced even with the discount and it was something that I wouldn't want even for free, and possibly not even if I got paid some small amount (for the time wasted).
- muhfuhkuh 16y agoThat might be because you don't do those activities and perhaps reticent to try new things. Most people shy away from anything aside from work, TV or Movie watching, going out to a select small group (or all corporate) restaurants, and do activities that, even if they may require an upfront cash outlay (biking, hiking, kayaking), are essentially free to do. Spa treatments and Tae-Bo classes aren't really marketed towards a majority 20-40 year old men in the fuddy-duddy computer and technology field.
- us 16y agoThen perhaps you lack the fundamentals of business altogether. If there is one rule I have had to repeat to so many (and only god knows why this even needs to be said) is that YOU do not represent everyone. Everyone is DIFFERENT and because people are different, everyone will have different wants and needs. Just because YOU don't want what Groupon or a similar service offer in your area for the particular deals you've come across does not mean this applies to everyone else around you. If you approach every business like that, 99% of the business in the world will probably be non-existant, after all, I'm sure there are a lot of things YOU don't use or want.
- deleted 16y ago[deleted]
- ryanwaggoner 16y agoIt seems an odd choice to argue this point in the comments on a story about how Groupon did 3/4ths of a billion dollars in the 2nd year of operations.
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- TorKlingberg 16y agoI wonder if it is sustainable. Are the merchants actually making good profits from using Groupon? Will consumers keep visiting Groupon if merchant only post deals they will actually make money on?