
Groupon considers sale to Google or fundraising - gibsonf1
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/11/20/BUFU1GENAB.DTL
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DevX101
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.

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cullenking
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.

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jmatt
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.

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barmstrong
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.

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muhfuhkuh
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.

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RBr
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...](http://robisit.com/idea-of-the-day-saturate-the-groupon-
model/)

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.

