

Yahoo considering bid for Groupon for up to $2 billion - cwan
http://kara.allthingsd.com/20101008/yahoos-ma-strategy-maybe-local-commerce-rather-than-content-hello-groupon/

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jmspring
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).

~~~
andrewljohnson
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.

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thehodge
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

~~~
cvg
They have $4 billion in current assets, so could go all cash on a buyout.
<http://finance.yahoo.com/q/bs?s=yhoo>

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bl4k
AOL is $2.68B with $2.5B in revenue

Yahoo should buy them, at least AOL have a new purpose that investors believe
in.

Yahoo's recent acquisition attempts seem very disparate with no real overall
goal (Yelp, Foursquare, etc.) or mission.

~~~
olegkikin
AOL has insane expenses, negating all the revenues. They netted negative
billion dollars in Q2 (in just one quarter!).

Their revenues are steadily declining:
[http://tctechcrunch.files.wordpress.com/2010/08/aolq2slide.j...](http://tctechcrunch.files.wordpress.com/2010/08/aolq2slide.jpg)

Buying AOL would be just dumb. I don't see them being profitable any time soon
(if ever).

~~~
cvg
But most recent quarters have been positive with income in the tens of
millions. Q2 had a large one time write down from restructuring.

Financially, AOL isn't looking too bad:
[http://www.google.com/finance?q=NYSE:AOL&fstype=ii](http://www.google.com/finance?q=NYSE:AOL&fstype=ii)

~~~
olegkikin
You're right.

However their margins are razor-thin in the previous quarters. Like Q4 of 2009
- net income of 1.4M (with 809M revenue).

We'll see how the restructuring goes.

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seles
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?

~~~
uvince
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.

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glenra
...but they only get to buy Groupon if 500 companies commit to submitting a
bid. And the offer's only good on alternate Fridays. :-)

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sandipagr
can't they create a successful groupon clone with multi-million eyeballs they
have?

~~~
notahacker
not to mention the advertising sales team and contacts they already have.

Even Yahoo surely wouldn't pay $2billion for a domain name and a mailing list,
would they?

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camz
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.

~~~
thwarted
[http://officialblog.yelp.com/2010/09/new-york-new-york-
deals...](http://officialblog.yelp.com/2010/09/new-york-new-york-deals.html)

~~~
camz
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...

~~~
dillydally
They send out emails. They're not relying on people reading the blog.

Also, [http://www.businessinsider.com/yelps-first-daily-deal-
beats-...](http://www.businessinsider.com/yelps-first-daily-deal-beats-
groupon-2010-9)

------
geuis
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...

~~~
seles
You mean Homer Simpson? or was that episode a reference to an existing
metaphor?

~~~
slantyyz
I thought that was Sideshow Bob's gag on the Simpsons.

~~~
seles
Oh yes, that is correct

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noelchurchill
There was recent post on HN that said 50% of Groupon customers would not
repeat. That's not a $2B company.

~~~
edash
Tell that to Comcast.

~~~
slantyyz
Comcast's offerings are arguably more "essential" and "desirable" to more
people than Groupon's.

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alphadog
Great way for Yahoo! to confirm what everyone else thinks about them. That
they are lost.

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razin
In her most recent interview
([http://www.usatoday.com/tech/news/2010-10-08-bartz08_CV_N.ht...](http://www.usatoday.com/tech/news/2010-10-08-bartz08_CV_N.htm)),
Carol Bartz called Yahoo! "the largest media company in the world." What does
local commerce have to do with media? Focus, Yahoo!, focus.

~~~
ianl
Yea but Yahoo does have some merchant services like Yahoo Stores and such, so
this would complement those services.

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owrange
who wants to be bought by yahoo? i think yahoo should move their buying spree
in the asian region like their successful purchase of korpol.

