Groupon not profitable? Interesting...

8 replies
Groupon amends IPO filing, ditches oddball accounting - Aug. 10, 2011

This, after Groupon recently turned down a 6 billion dollar offer from Google.

I dunno, but if I had a mailing list of 116 million subscribers, I think I just might be able to figure out a way to make it "profitable".

Perhaps Groupon needs to buy a good WSO about "email marketing", lol.
#groupon #interesting #profitable
  • Profile picture of the author Cheree C
    Can I ask what is Groupon?
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  • Profile picture of the author BloggingPro
    How do they lose money? If its their advertising, maybe they should alter their network targeting so that they don't have as much waste. With that 116 million person list they could turn Groupon into a membership site, charge a low monthly fee and try to shore up their expenses.

    There is no reason why they should be unprofitable. Someone in the big boy chair needs to seriously look at the expenses and see what is going on.
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    • How do they lose money? If its their advertising, maybe they should alter their network targeting so that they don't have as much waste.

      Groupon's second quarter results: They had sales of $878 million, but lost $102.7 million.

      Which means they SPENT $980.7 million in three months. That's nearly a billion dollars.

      Why did they do that, you ask? They did that to grow their list as fast as they possibly could.

      With that 116 million person list they could turn Groupon into a membership site, charge a low monthly fee and try to shore up their expenses.

      Doubtful. They probably could have at the beginning but it's too late for that. Groupon is cannibalistic: It ends up consuming many of the businesses it promotes. At some point it will run out of restaurants, spas, hotels, flightseeing operations, etc. to use up. In some markets that point is here because Groupon's competitors are charging a lower take rate. (Groupon takes 1/2 of all monies pulled in on a Groupon.)

      Groupon should have taken Google's $6 billion and Google is lucky they didn't.

      fLufF
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  • Profile picture of the author JamesGw
    It's insane how much money those people have to throw around. They won't be operating at a loss indefinitely, but I think it'll be some time before they start making money. Youtube was losing money for years. I still don't know if they turn a profit.
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    • Profile picture of the author Brandon Tanner
      Originally Posted by JamesGw View Post

      They won't be operating at a loss indefinitely
      Maybe, maybe not. A lot of people don't think that their business model is sustainable in the long run (if a local business doesn't know how to handle a Groupon "day", it can cause that business more harm than good due to Groupon's huge "cut" of the profits... and more and more businesses are starting to realize that).

      Not to mention they are facing an ever-growing amount of competition from other "daily deal" sites, some of which are offering local businesses a much more attractive "deal" than Groupon currently does.

      Not that I don't like Groupon. Just sayin'
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  • Profile picture of the author SocialMediaOwls
    What I'm not understanding is how these companies impress investors when they have shown year after year that they can't monetize (yeah, I'm talking to you Twitter)

    Who are these idiots that keep giving money to Twitter/Groupon/Facbook?
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    • Originally Posted by SocialMediaOwls View Post

      Who are these idiots that keep giving money to Twitter/Groupon/Facbook?
      Venture capitalists.

      They only have to hit a home run 1 out of every 10 at-bats or so. (Sorry, I'm lousy with sports metaphors.)

      The money guys are nostalgic for a return to the tech bubble years. It actually was a pretty exciting time to be in Silicon Valley -- and annoying too.

      fLufF
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  • Profile picture of the author Michael Dominic
    "Groupon is now in 46 countries and has about 8,000 employees, up from 1,500 just a year ago." -Andrew Mason, CEO

    Groupon Now Has 8,000 Employees
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