[$25 BILLION!] Groupon - Anyone ready to buy in to the next dot com crash!

33 replies
How the hell can a business, overvalued at $6 billion in Q4 2010, 3 months later be worth or even valued at $25 Billion+ ???

G.roupon gossip on the IPO is that its worth it... how?

2 year old company, lost its sparkle in the niche, rehashed idea from the 80's and its worth that!

Sounds like the spin doctors (who were not about in 2000! crash) and bankers all want a chunk of the coin action... problem with that is when the next *big thing* gets put online from the real world, the price will plummet!

Input anyone?

We know the signup emails have doubled from about 35 mil to 65 mil in the last Qtr, but most of those are just signing up or spam!

There are a bundle of start up / non funded / crazy IM idea people, the banks / investors could invest in and make much more coin for a lot less risk!

Looks like its BOO.com all over again LOL
#$25 #billion #buy #crash #dot #ready
  • Profile picture of the author Martin Luxton
    If you're handling an IPO and your fees are directly related to the size of the offering, why would you value it it at $6 billion if you could fleece people out of $25 billion?

    Don't leave money on the table!!


    Martin
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    • Profile picture of the author daddykool
      Originally Posted by Martin Luxton View Post

      If you're handling an IPO and your fees are directly related to the size of the offering, why would you value it it at $6 billion if you could fleece people out of $25 billion?

      Don't leave money on the table!!


      Martin
      Just had me cracking up with that Martin

      Spot on I guess, however, from the BS that is flying and the fact that this thread will be viewed again by Bloomberg (who nicked my headliner!) in a cobbled together report, I think it is WAYYYYY over the odds...

      Guess those that are interested, will just have to wait and see, those that are clever will just buy GOLD and OIL
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      • Profile picture of the author Tashi Mortier
        I guess that this high numbers are just being used by some sneaky investors to make the quick buck.

        They buy huge packages of shares and then they make even higher offers to make the prices go up and meanwhile they sell their shares to private investors.

        So when the bubble bursts they will have made their nice profit and all the private investors will have lost money.
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        • Profile picture of the author Mike McAleer
          Originally Posted by Tashi Mortier View Post

          I guess that this high numbers are just being used by some sneaky investors to make the quick buck.

          They buy huge packages of shares and then they make even higher offers to make the prices go up and meanwhile they sell their shares to private investors.

          So when the bubble bursts they will have made their nice profit and all the private investors will have lost money.
          Exactly! The big guys always survive these crashes and it is annoying
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          • Profile picture of the author Jonathan Beaton
            Originally Posted by Mike McAleer View Post

            Exactly! The big guys always survive these crashes and it is annoying
            Truth.
            The real money is not made IN the market, it's made off the market.
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  • Profile picture of the author Mohammad Afaq
    rehashed idea from the 80's and its worth that!
    Oh god, I so don't wanna get started on this one.

    Okay here's a little something:

    Just because something is old doesn't mean it's worthless. The wright brothers created the first airplane in the early 1900s, that doesn't mean airplanes are worthless.

    Weight loss niche is also old as hell. Here's a weight loss article from the 1930s: http://news.google.com/newspapers?id...ght+loss&hl=en

    EDIT: I also found another article from 1928: http://news.google.com/newspapers?id...ght+loss&hl=en

    Now, would be fair to call every single weight loss program out there old and rehashed.

    Ideas, technology, anything can always be improved and done over again. Nothing wrong with that and that doesn't devalue it.

    Also that reminds of of the fact that Math is Rehashed
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  • Profile picture of the author Mohammad Afaq
    Also, according to wikipedia:

    Early web-based forums date back as far as 1994
    Can I ask you how much warrior forum is worth?

    It's most certainly a rehashed idea
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  • Profile picture of the author RussRuffino
    You guys, think it through: Groupon's business model is the most elegant and simple profit machine I have ever seen.

    They convince merchants to provide a discount on their services in exchange for 24 hours of exposure on Groupon's website. That's it. That is ALL they do.

    What does Groupon get for this? 50% of the volume for all the deals sold that day. And the "tipping point" concept is amazing as well. They KNOW that it's impossible for them to sell less than 100 deals (or whatever the tip is), so they are absolutely assured of making that much, or nothing at all.

    My point is this: Groupon gets full access to 50% of the revenue of a business for 24 hours during a buying frenzy. In exchange for this, they do NOTHING except feature the business on their site. That is it.

    The guy who thought of this is an absolute genius.

    Russ
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    • Profile picture of the author Tashi Mortier
      Originally Posted by RussRuffino View Post

      They convince merchants to provide a discount on their services in exchange for 24 hours of exposure on Groupon's website. That's it. That is ALL they do.
      That is why they can be so easily replaced. They offer nothing unique, the only thing unique about them is their prominence in doing so. Facebook or Google could easily create a spin-off that does the same and use their customer base to create a website of their own that could outrun groupon.
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      • Profile picture of the author DWolfe
        Originally Posted by Tashi Mortier View Post

        That is why they can be so easily replaced. They offer nothing unique, the only thing unique about them is their prominence in doing so. Facebook or Google could easily create a spin-off that does the same and use their customer base to create a website of their own that could outrun groupon.

        Sounds like a few warriors here should put this idea together sell it to Facebook and Google, than launch a WSO how we made millions and put groupon out of business :rolleyes:
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        • Profile picture of the author Tashi Mortier
          Google already wanted to buy Groupon, but they refused or something.

          I'd bet 50 bucks that Google will come up with something of its own in the next year.
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          • Profile picture of the author AccountCache
            Originally Posted by Tashi Mortier View Post

            Google already wanted to buy Groupon, but they refused or something.

            I'd bet 50 bucks that Google will come up with something of its own in the next year.
            Looks like Google is already working on something - Google Offers - Google to Launch Groupon Competitor [EXCLUSIVE]

            Google Offers
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          • Profile picture of the author minisite
            Originally Posted by Tashi Mortier View Post

            Google already wanted to buy Groupon, but they refused or something.

            I'd bet 50 bucks that Google will come up with something of its own in the next year.
            Groupon refused to be purchased by Google for $6 billion because they believe their company will expand and hoping to become a major player in food and retail industry around the world. I think that Google also wanted buy them because Groupon is seen as a threat to Google's market.
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      • Profile picture of the author RussRuffino
        Originally Posted by Tashi Mortier View Post

        That is why they can be so easily replaced. They offer nothing unique, the only thing unique about them is their prominence in doing so. Facebook or Google could easily create a spin-off that does the same and use their customer base to create a website of their own that could outrun groupon.
        That's like saying that since Facebook replaced MySpace, MySpace is "easily replaced" and therefore Facebook is "easily replaced". It's NOT easy. You have to beat them at their own game.

        Having a brilliant business model doesn't mean you're immune to competition, it just means you're the top dog right now, and that's a multi-billion dollar place to be. Can someone beat them? Of course...but ANY corporation can be beaten. In the meantime, that guy became a billionaire in less than 18 months.

        I'll take it, thanks.

        Russ
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      • Profile picture of the author WillR
        Originally Posted by Tashi Mortier View Post

        That is why they can be so easily replaced. They offer nothing unique, the only thing unique about them is their prominence in doing so. Facebook or Google could easily create a spin-off that does the same and use their customer base to create a website of their own that could outrun groupon.
        Your logic would say that any website can be replaced. MySpace, Facebook, eBay, the whole lot. They are at the end of the day, just a whole lot of code. But just because their concept is not unique does not mean they can be easily copied. Their uniqueness is their market position and market share which is very hard to replicate.

        If it were so easy then Google would already have tried to take on Facebook with their own social network. Why haven't they?

        That's like saying I can go and open up a hamburger restaurant and take on McDonalds because at the end of the day, we are both just cooking hamburgers.

        That's a ridiculous argument and simply not true.
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        • Profile picture of the author Tashi Mortier
          Originally Posted by WillR View Post

          That's like saying I can go and open up a hamburger restaurant and take on McDonalds because at the end of the day, we are both just cooking hamburgers.

          That's a ridiculous argument and simply not true.
          Yep, if you take it that way it is ridiculous. But if you were Google and you would start GHamburger and advertise it on your homepage, you can be sure to get a bunch of sales.

          I didn't say that just everyone could replace them, but someone with a user base as large as Google or Facebook could.

          Why they don't replace something like eBay? Well probably because it's an investment they don't want to make.

          edit:

          Some new thought that just came to my head: Of course it's hard to tackle something lice McDonalds, because they have unique recipes. You can't just go and copy each and every burger of them. But I guess groupon doesn't have a unique taste. It's really just listing of offers. So for the customer it's totally the same to click on "Google group deals" or Groupon.
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        • Profile picture of the author Mike McAleer
          Originally Posted by WillR View Post

          Your logic would say that any website can be replaced. MySpace, Facebook, eBay, the whole lot. They are at the end of the day, just a whole lot of code. But just because their concept is not unique does not mean they can be easily copied. Their uniqueness is their market position and market share which is very hard to replicate.

          If it were so easy then Google would already have tried to take on Facebook with their own social network. Why haven't they?

          That's like saying I can go and open up a hamburger restaurant and take on McDonalds because at the end of the day, we are both just cooking hamburgers.

          That's a ridiculous argument and simply not true.
          There is something called the network effect in economics.

          It states that the more people using the product the more value it has and this is very true especially with social networks. Who would want to use a social network that their friends aren't using? NOBODY!
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      • Profile picture of the author SocialMediaOwls
        Originally Posted by Tashi Mortier View Post

        That is why they can be so easily replaced. They offer nothing unique, the only thing unique about them is their prominence in doing so. Facebook or Google could easily create a spin-off that does the same and use their customer base to create a website of their own that could outrun groupon.

        Right on, nothing proprietary....they will be nothing in 6 months...."facebook deals" is ready to launch amongst others....

        Hey greedy CEO, take the cash now and run.
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    • Profile picture of the author Greg guitar
      Originally Posted by RussRuffino View Post

      You guys, think it through: Groupon's business model is the most elegant and simple profit machine I have ever seen.

      They convince merchants to provide a discount on their services in exchange for 24 hours of exposure on Groupon's website. That's it. That is ALL they do.

      What does Groupon get for this? 50% of the volume for all the deals sold that day. And the "tipping point" concept is amazing as well. They KNOW that it's impossible for them to sell less than 100 deals (or whatever the tip is), so they are absolutely assured of making that much, or nothing at all.

      My point is this: Groupon gets full access to 50% of the revenue of a business for 24 hours during a buying frenzy. In exchange for this, they do NOTHING except feature the business on their site. That is it.

      The guy who thought of this is an absolute genius.

      Russ
      It's great for them, but I wonder if it's maybe a little too great. When you're charging sky-high rates for providing a very bare-bones, basic service, (like you said-all they do is feature you for a day) watch out for others coming up and grabbing a chunk of your market share by creating a lot more value at a fraction of the cost.

      They are not the only ones who can feature a half off deal. In my opinion, the only thing they have over the competition now is that they have critical mass-tons of traffic to offer for the instant big results. But that doesn't mean someone else isn't positioning themselves to step in. I think they've made themselves really vulnerable.

      Along with their success stories are horror stories. Doing a Groupon deal is very risky for many businesses, and if they don't run the numbers carefully enough, they could soon find themselves drowning as they try to fulfill on the offer. I've heard of companies that went under as a result.

      Just my 2 cents-obviously they are on top of the world now, and I can't argue with success, but things could change-look at the fall of myspace. I kind of hope Groupon does get taken down a notch-to me the service they offer is nowhere near worth giving up half the sale on the front end, especially when all the value in their site is being created by the client in the first place.

      I'd rather just drive traffic on my own over a month's time, and give the customers the extra 25% off, than give it to Groupon for the big glut of low profit, or even loss-leader sales. Or give the same deal for double the initial revenue, even if it takes way longer to get the sales-which might actually be an advantage.
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    • Profile picture of the author TracyNeedham
      Originally Posted by RussRuffino View Post

      You guys, think it through: Groupon's business model is the most elegant and simple profit machine I have ever seen.

      They convince merchants to provide a discount on their services in exchange for 24 hours of exposure on Groupon's website. That's it. That is ALL they do.

      What does Groupon get for this? 50% of the volume for all the deals sold that day. And the "tipping point" concept is amazing as well. They KNOW that it's impossible for them to sell less than 100 deals (or whatever the tip is), so they are absolutely assured of making that much, or nothing at all.

      My point is this: Groupon gets full access to 50% of the revenue of a business for 24 hours during a buying frenzy. In exchange for this, they do NOTHING except feature the business on their site. That is it.

      The guy who thought of this is an absolute genius.

      Russ
      Exactly. And people forget that they have the advantage of already dominating the market. Where do advertisers want to go? To the one with the most eyeballs.

      I have a friend with a car wash business who does it and loves it. Yet, when he tries to tell other businesses about it, many don't get it. They see it as giving up revenue instead of thinking about how many new customers they'll get. He knows how many he gets, and he knows it's more than well worth it.

      Groupon also has more experience in knowing which businesses work the best and which don't. The others will figure that out in time, of course, but again--more profits in the meantime.

      In fact, I've heard in some cities it can be nearly impossible for a business to get in on Groupon because the demand is so overwhelming.

      Can others duplicate their success? Sure. They do have some big advantages at the moment though. And if they're smart enough to come up with this, I bet they're smart enough to come up with ways to stay ahead of the pack.

      And Google does occasionally fail at things you know. LOL
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  • Profile picture of the author O0o0O
    Groupon by itself doesn't have much worth, but when it's integrated into Google maps, Google places, Google Product Search and all the rest, then that's when the value jumps up.
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    • Profile picture of the author goindeep
      This is why they are worth that much:


      They are a super secret sect that plan to eat our babies!


      Hell, i dunno. If it where me id say its a load of B.S. Just trying to pump up the figures for the initial public offering. I along with 99% of the warriors here have no direct experience with IPO's but id say that if someone aske dme to by groupo share id tell them to go stick it no matter how cheap it was because i dont see them growing unless they bring out some other services, hence the BS figure!

      Or maybe its just cos this dude is so shockingly normal:

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    • Profile picture of the author steveo
      Originally Posted by O0o0O View Post

      Groupon by itself doesn't have much worth, but when it's integrated into Google maps, Google places, Google Product Search and all the rest, then that's when the value jumps up.
      oh wow I did not know this, I've heard of groupons impressive coupon affiliate program and how popular it's gotten. It's tied to off line businesses yeah? Which gives it a more profitable edge.
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  • Profile picture of the author willyboy104
    OK, so we all know Google tried to purchase Groupon in late 2010, Groupon declined this offer and I personally believe it was probably as a result of the current investors not wanting Google to take over another massive brand and add this in to the network of Google owned companies.

    In terms of Groupon being a 2 year old company, that is true and not true at the same time. The original company which was set up in Chicago 2008 was trading as and created as Groupon. However when they decided to expand internationally, they merged or acquired MyCityDeal, a European company who were operating in the same way. Therefore, Groupon Europe actually became MyCityDeal trading under the Groupon brand.

    This was also the case in Japan, Groupon purchased a company in Japan and added the Groupon brand but traded as the original company.

    Now, Groupon Europe (MyCityDeal) has been around for 1 year, Japan approximately 9 months and since then Groupon has moved in to Taiwan, China and many other countries, they are also moving in to South Korea very soon.

    In China, Groupon has joint ventured, with the biggest web company in China, Tencent who own the very famous, very large instant messaging service QQ, among many other web companies and platforms. With this move in to China, if all goes well Groupon will be worth a ridiculous amount of, far more than anyone could imagine.

    The reason for this is the current growth rate of E-commerce in China along with the population of China, and the current expenditure online in China, to sum it all up Chinese E-commerce even now, is far more profitable than the USA.

    For example, on TaoBao, China's largest E-commerce store, they sell oer 52,000 items every MINUTE. That's one website....

    Anyways, the valuation of Groupon cannot be accurate, it's merely what a company would pay for it. It totally depends on what you find to be the most important assets, if it's subscribers then Groupon isn't worth $25+ billion, merely because you can purchase subscribers much cheaper through CPA, such as Groupon has been doing the past 2 years.

    In terms of people saying Google, and Facebook should do the same, well they are doing.

    Facebook has integrated Facebook deals within their Facebook places and this is still being tested but apparently is live.

    Google have been planning on creating Google Offers, which I assume would be integrated in to Google Maps and all of Google's other location based software.

    TIP: Want to make lots of money, start looking in to location based marketing, geo-advertising, whatever you want to call it...

    Not only are Google and Facebook doing the same thing, but Bing are doing their own deals...New York Times do their own deals and there are of course, other companies who compete directly with Groupon such as Living Social.

    Living Social are Groupon's main rival, with an investment from Amazon of $11 million, they are still very small in comparison.

    Another competitor is KGB deals, very very small competitor but for some reason have a good marketing budget and currently pay more per lead and CPA than Groupon does.

    I will leave this here for now but if anyone has any questions let me know.

    I work as the Online Marketing Executive at Groupon UK and would be happy in answering any questions.

    Also, if anyone is interested in affiliating with Groupon let me know
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  • Profile picture of the author janekk
    This is great example of best internet marketing
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  • Profile picture of the author fitz10
    Google and Facebook have already tried to replicate Groupon's success and have not. Google has been putting coupons for local businesses out since at least last August (that's when I first got one, I imagine they launched well before I got one though) and are now launching a more fleshed out program but it still is kind of under the radar. Facebook has Facebook Deals which really is more of Foursquare rip off than a Groupon replica, but the point is, it still hasn't gotten as popular as one would expect. Living Social has encroached on Groupon's space more than Google or Facebook at this point.
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  • Profile picture of the author TiffanyLambert
    Just an fyi - all my NON marketing friends all have signed up and blab about it all the time. Stuff sells out around here in droves. Whatever the business model - it's working. Especially in a bad economy when savings are imperative.
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    • Profile picture of the author bhuff85
      Originally Posted by TiffanyDow View Post

      Just an fyi - all my NON marketing friends all have signed up and blab about it all the time. Stuff sells out around here in droves. Whatever the business model - it's working. Especially in a bad economy when savings are imperative.
      I agree. EVERYONE is looking to save money these days, no matter what the case may be. Coupons and deal sites like this will continue to thrive. I'm actually launching a local coupon business in my city (not like LivingSocial or Groupon), and I've already generated a lot of local interest in it. Just working on getting other businesses signed on now, but it's definitely something that I could see growing in the long run.

      There are TONS of businesses that are similar in nature, yet thousands of them continue to thrive. It's all about giving people what they want, standing behind your brand and delivering on your promise. That's the real recipe for a sustainable business.
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    • Profile picture of the author ladywriter
      Originally Posted by TiffanyDow View Post

      Just an fyi - all my NON marketing friends all have signed up and blab about it all the time. Stuff sells out around here in droves.
      See, interesting to get different perspectives. NO ONE I know even knows what it is. After reading all the hype I've brought it up to a number of people and get blank stares.
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  • Profile picture of the author Mike McAleer
    I don't think that anyone would actually buy it for that much because you can't really go up from here in my opinion.
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  • Thanks for the thread reading....Interesting reading for sure... Not bad for the fastest growing company in Web history (according to Forbes)

    Definitely worth watching more how a 2-year-old online start-up deal-of-the-day website boldly turned down a $6 billion acquisition offer from Google.

    Do you think this is their business model: selling discount vouchers to restaurants, services, big-box retailers, etc., at a major markdown--reportedly up to 90% off a retailer's full prices--and then making the retailer pay back a big chunk of the voucher revenues back them.
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  • Profile picture of the author LetsGoViral
    To fool investors obviously. Goldman Sachs did this with Facebook. Inflating value = more investors.
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