Why Groupon Needs $950 Million More | Hacker News Reader

Why Groupon Needs $950 Million More

pmorganbrown.com

20 pointsatularora13 comments

Unless Google put significant earn-outs in the acquisition (possible) - was there any real downside to Groupon accepting an offer that they knew was bound to fail? It's not as though a failed $6B acquisition would really have negatively impacted GOOG's $190B market cap, so, even it had been a stock deal - they could have taken the money and run.

I think the better answer is that (A) The Groupon guys thought they were worth more than $6B, and (B) they wanted to keep running their own show and find their place in the sun.

Touche. I was having this discussion with a coworker the other day and I was saying sort of the same thing. People think it was unwise to refuse Google's offer, but Google's culture and track record regarding what need's to be done to make Groupon big make selling to Google the wrong decision. If they had accepted Groupon would have undoubtedly died a gruesome death or end up merged into a subdivision of Adwords quietly collecting dust.

I don't get it - how is Groupon supposed to scale? What would be the point of them having 100000 small businesses in a city? They could hardly put them all on their homepage? Also, they would need enough visitors to their homepage to drive business to all their clients.

What does Groupon offer, besides traffic (ie people who visit the Groupon homepage)? Can't small businesses just make up their own special offers? I mean if they are not on the front page of Groupon, they would gain little by going through Groupon, or so it seems to me.

Goto Groupon.com, the first thing they ask for is your town/city. So the "homepage" changes based on that.

I know, but it is not very fine grained, is it?

Over time, they will improve their targeting.

You're thinking short term, Groupon just needs to get to the stage where people think "I'll just check Groupon to see if I can get this cheaper" before every purchase. Then there's a million things they could do to take advantage of that visitor's purchasing intent, local price comparison for example

None of these things are exclusive to Groupon, though. There are already lots of aggregators for coupons where you can check if you can get something cheaper.

The point is that these aggregators are not in everyone's mind today. Groupon can use their current offering to reach everyone's mind, and then use that positioning (and therefore you going to their site) to do price comparison, focus on the user choosing specific topics of interest, etc.

Yes but the counterpoint is that it's an easy-to-replicate idea

Having a large mindshare in a specific niche is neither an idea nor is it easy to replicate.

Yeah but my point is, the only point of Groupon is their web site. So I don't see the point of them throwing sales people at small businesses. They need mindshare with their website, and I don't think you can drive internet traffic with sales people.

They will certainly try to expand into different markets as well.

e.g. open a store a la amazon with all the shops they features, etc, while having still a groupon deal each day on their site.

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