One interesting number for last quarter, from total sales of $878 million, $341 million or 39% was actually Groupon's. Which definitely seems to be proof that the days of 50/50 splits are over, if any merchant prospects about to talk deal terms hadn't already gotten that memo.
Groupon updates IPO filing, admits it's unprofitable
21–30 of 89 posts
Re: Groupon updates IPO filing, admits it's unprofitable
#22Groupon not selling to Google was the dumbest thing I've ever seen a company do. Ever.
This is pretty simplistic thinking. For all you know Groupon wanted the deal badly, Google walked away from the deal, and both parties agreed to go with the story that Groupon walked away so that it wouldn't kill their prospects of an IPO.
It's always nice to cushion your IPO with fraud...
Re: Groupon updates IPO filing, admits it's unprofitable
#23 It would be interesting to find out how other coupon sites with similar business models are fairing--as much as the land grab theory makes sense, I actually wonder about the current system of offering stuff I normally wouldn't want for cheap being a viable business.
A little off topic but I've been noticing a lot of "TeamBuy" ads on TV (I live in Canada)--one can't help but think that until competition like that is settled there will continue to be tremendous growing pains for Groupon and company.
Re: Groupon updates IPO filing, admits it's unprofitable
#24Earlier quoted context omitted.
No worries: We exclude those costs because, unlike our other marketing expenses, they are an up-front investment to acquire new subscribers that we expect to end when this period of rapid expansion in our subscriber base concludes See? Once they acquire all of their subscribers, they will never have to acquire subscribers again. Then they can just rake in the dough.
Well, it's plausible , right? The users they have will stick around, and if they stop spending so much on customer acquisition they might be able to reduce their cut and make a profit, meaning even better deals. It could happen. Or does this not pass the sniff test for some reason I'm missing?
There will always be people who scour coupon sites for deals, even taking into account natural customer churn. It's conceivable that Groupon could be the Google on coupon hunting.
However the number of coupons available isn't going to increase forever, and may well already be in decline (for some measure of businesses using Groupon compared with deals offered).
This is because those businesses see Groupon as a way to infrequently attract a large number of people to try their products at a price that they would not be able to sustain for other marketing models such as advertising.
The only way Groupon can "grow" is to continually reach new businesses to ensure that the number of coupons available is high. However, eventually the well will run dry.
Re: Groupon updates IPO filing, admits it's unprofitable
#25Groupon not selling to Google was the dumbest thing I've ever seen a company do. Ever.
This is pretty simplistic thinking. For all you know Groupon wanted the deal badly, Google walked away from the deal, and both parties agreed to go with the story that Groupon walked away so that it wouldn't kill their prospects of an IPO.
Why would Google go along with a story that made it look like they were powerless to get what they wanted?
Re: Groupon updates IPO filing, admits it's unprofitable
#26Groupon not selling to Google was the dumbest thing I've ever seen a company do. Ever.
Google's offer was $6B. The IPO is priced at $30B. I am scratching my head how that is the dumbest thing you have ever seen a company do. Ever. I can see the IPO valuation getting cut to a more reasonable $10B, but that is still more than the Google offer.
Who's to say the IPO will be successful? The suits will have to keep their shares for a bit, plenty of time for the whole mess to unfold. Plus, Groupon raised a ton of VC ($950M) after turning down Google's offer. Factoring in dilution, it won't take a drastically bad IPO to make $6B in-hand look like a steal.
Re: Groupon updates IPO filing, admits it's unprofitable
#27If you are interested in Groupon's actual performance rather than a reporter's linkbait, see the filing. I find the table on page 57 rather informative about the current state of the business.
http://sec.gov/Archives/edgar/data/1490281/00010474691100717...
Re: Groupon updates IPO filing, admits it's unprofitable
#28What I don't understand is that Google Offers has essentially mimicked the same type of "deals" that Groupon is offering ... usually NYC restaurants I've never heard of, or activities I'm not interested in. Today's offer is "$15 for a tour of the Ground Zero Museum Workshop (up to a $25 value)". So I unsubscribed. I feel like Google had/has a tremendous opportunity to do what Groupon does, but do it with offers that…
Well I think what you're describing there is exactly the reason Groupon isn't making a profit- they have to spend a ton of money on marketers, reaching out to businesses in order to secure deals. Google appears to not be doing that, and suffers as a result.
Re: Groupon updates IPO filing, admits it's unprofitable
#29Earlier quoted context omitted.
No worries: We exclude those costs because, unlike our other marketing expenses, they are an up-front investment to acquire new subscribers that we expect to end when this period of rapid expansion in our subscriber base concludes See? Once they acquire all of their subscribers, they will never have to acquire subscribers again. Then they can just rake in the dough.
I'm surprised so few people are familiar with the "land grab", it seems to me that's what they are attempting. In the early days Amazon was spending something like $20 on average per customer acquired and was losing money hand over fist. That's not to say I think Groupon will be the next Amazon: This is a risky strategy. But it can pay off massively if you cement yourself as the only big player in an emerging market.
A land grab only makes sense if you have constructed or inherited barriers to entry... what are their barriers? They're grabbing land that will be stolen the next day from them by LivingSocial or Google Offers...
Re: Groupon updates IPO filing, admits it's unprofitable
#30Earlier quoted context omitted.
Google's offer was $6B. The IPO is priced at $30B. I am scratching my head how that is the dumbest thing you have ever seen a company do. Ever. I can see the IPO valuation getting cut to a more reasonable $10B, but that is still more than the Google offer.
Who's to say the IPO will be successful? The suits will have to keep their shares for a bit, plenty of time for the whole mess to unfold. Plus, Groupon raised a ton of VC ($950M) after turning down Google's offer. Factoring in dilution, it won't take a drastically bad IPO to make $6B in-hand look like a steal.
Hundreds of millions of dollars already went to the founders. The only risk is whether they'll be super rich or ultra super rich.