Groupon considers sale to Google or fundraising | Hacker News Reader

Groupon considers sale to Google or fundraising

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24 pointsgibsonf18 comments

If I were heading Groupon, I'd absolutely sell.

They are the market leader by far, their valuation is high right now, but there are some well funded competitors just coming into the space. Most importantly, their customers have low switching costs.

What's to stop them from losing 30% of their customers to AOL, Yahoo, or Yelp once these new entrants ramp up their operations?

Sell now, while they have the stratospheric valuation and the leverage & profitability to defend that value.

They are not the market leader by far at least in terms of uniques: http://venturebeat.com/2010/10/19/livingsocial-acquires-urba...

Regardless, that only supports your key point. In terms of the right time to sell, they are peaking and they should.

I think the fact they are out there seemingly shopping their company around says to me: "this b model is not defensible, the valuation is not sustainable, let's offload it."

Or facebook...I still haven't figured out why facebook hasn't stepped into this space yet. They have the distribution, they just need the marketers in select regions.

They are. Though I don't use facebook enough to really know if it makes sense.

Facebook Places:

http://www.facebook.com/places/

http://news.ycombinator.com/item?id=1616082

Facebook Deals:

http://www.facebook.com/blog.php?post=446183422130

http://news.ycombinator.com/item?id=1865817

EDIT: Updated style.

I think at the core, these are different companies. FB is a social network, groupon is a deal site. The skill set to dominate these two spaces is very different.

Agreed, they have a huge distribution channel but so does for instance Target or Walmart, but groupon just doesnt align to those companies core competencies. Hence not a great fit.

Fundraising? I thought they were making money hand over fist.

What is up with all these Silicon Valley "success" stories that can't get profitable enough to sustain themselves w/o more financing (e.g. Facebook, Twitter, Mint, etc).

Fundraising is fine early on, but these companies are pretty big and mature. When do you actually start turning a profit? We have some weird definitions of success in the valley.

Amazon was losing money for the first 7 years of its existence. It didn't turn a profit until 2001, a full 6 years after it had sold its first book.

Groupon's "flash in the pan" days are behind it. They created a new niche on the Internet and now, a very large number of clones are nipping at their heels.

Online, Groupon's business is about leadgen. Offline, Groupon's business is about selling the exposure they can give to a local business. Both their online leads and their access to offline local businesses are quickly being diluted.

If Groupon takes funding (for the right reasons), they will have thought up a great new product that contributes to the new vertical they have created in a unique, limited way. Based on their "Groupon Stores" idea, I don't think that they have have this in them.

I wrote a blog article a while ago that describes what I think is the only natural course for Groupon: http://robisit.com/idea-of-the-day-saturate-the-groupon-mode...

In my mind, Groupon needs to do what they've been doing. They need to move hard and fast as far into every hyper local market that they can. They need to refine their leadgen, their delivery and their formula for local businesses to succeed.

As an outsider looking in, I don't think that Groupon has the capability to move hard or fast enough. As a result of these things, I think that Groupon should either sell now or obtain enough funding to hire a significant number of sales people. Personally, I'd sell.

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