Yahoo likely has the money/stock, but is GroupOn really worth it? They have the buzz, but J'aime Ohn (winner of Techcrunch Disrupt) had a great point in not supporting companies based on "destroying other businesses".
Groupon has the buzz and deals coming in. But their track record for satisfied "business customers" is spotty. As the reputation for spotty deals / lack of returns grows, the less likely Groupon (and related) are to find deals. It is a finite market.
That said, given it is a "finite market", with (in my uneducated view point) little upside, I can wholly see Yahoo entering a big deal. They haven't done much recently that makes sense, so over paying for Groupon would totally support that model.
I'm neither a groupon customer, nor do I play one on TV (nor do I use Yahoo regularly).
The only people who think Groupon destroys businesses are people trapped in the Hacker news echo chamber.
There is one article on a restaurant saying Groupon didn't work out, and that gets extrapolated to mean there is some fundamental problem with the business.
You learn to discount stories like that after a while.
Does Yahoo! even have $2 billion to spend on something? I don't remember them buying anything above a few million in a long time and Groupon doesn't scream 'turning around the fortunes of the company' to me
Cash and Short term investments stood at 2.75B as of June 30, as the article says their market cap is 19.5B. I would guess it wouldn't be an all cash purchase but likely a combination of cash and stock.
You make a good point, AOL would fit more into Yahoo's perceived strategy as being a content company.
Yelp, and Foursquare are great examples of the general lack of strategy or direction to those of us that follow the tech scene closely.
They need to decide whether they are going to play with the big boys and solve interesting problems or continue the web1.0 style of being a landing page.
Could someone please explain to me how Groupon could possibly be worth $2 billion?? They aren't fully "mainstream" yet, and there service can easily be redeveloped.
I have not used them yet, is there something I am missing here?
If Groupon can really make $400 Million in sales this year at 50%+ margins on the deal then they could be worth quite a bit on the surface. However, with recent acquisitions and other costs, I would expect their expenses to be through the roof.
Problems:
-500 Employees is a lot of overhead.
-Acquisitions are spendy, too, and add more overhead.
-When businesses wise-up they are either going to have only Gap deals left or have to significantly lower their margins in order to drive real value to the merchant. Not every mom & pop business is going to fall for this "we sell it for $10 and give you nothing sales pitch."
I'm impressed with what Groupon has built, but the valuation seems inflated for a company that has so many vowels in its spelling.
I think that groupon should work to build an alliance with yelp or that they should consider a merger. I personally don't use groupon and don't particularly like the discounts they offer (i've viewed their options pretty regularly because i'm cheap.)
Yelp would've been a great fit with groupon because they both focus on local niche markets. Yelp often allows clients to offer discounts if the customer mentions "yelp." A great way for yelp to monetize their huge market and crowd-sourced reviews would be to allow individual business develop groupon like mini promotions.
I wouldn't be surprised if this type of product would help generate an entirely new level of revenue for both companies.
Its ironic that neither company has thought of this.
that is the worst attempt at the groupon implementation i've ever seen. i would never read the yelp blog and wouldn't be surprised if more than 90% of the users are similar to myself. if you're going to try to give discounts you'd clearly place the coupon within the actual review...
Yahoo physically reminds me of the comedic fool wandering about in a field of rakes, continually hitting himself in the face. Yet again, up comes the rake...
Let's go with metaphor. I've seen it happen to Homer and in old cartoons, on some movies, and even once in real life. It's quite a striking visualization, at least to me.
Profit or not, it would be incredibly foolish for I or any other person to buy Yahoo stock given their decade+ pattern of behavior of expending exorbitant amounts of money to buy companies that a) are not worth that much and b) eventually killing the companies they purchase. If Groupon is to succeed, I think they are best to remain independent at least for a few years and really try to grow their company. Personally, I'm tired of seeing potentially long-term successful companies being purchased and mangled by bigger companies that can't successfully expand or incorporate those startups.
Groupon has the buzz and deals coming in. But their track record for satisfied "business customers" is spotty. As the reputation for spotty deals / lack of returns grows, the less likely Groupon (and related) are to find deals. It is a finite market.
That said, given it is a "finite market", with (in my uneducated view point) little upside, I can wholly see Yahoo entering a big deal. They haven't done much recently that makes sense, so over paying for Groupon would totally support that model.
I'm neither a groupon customer, nor do I play one on TV (nor do I use Yahoo regularly).