Australia’s Scoopon founders and group buying millionaires, Gabby and Hezi Leibovich, have settled a prolonged legal battle with group buying giant Groupon. Groupon took the duo to court last year, filing cases in the US, New Zealand and Australia, after discovering that not only did the Leibovich’s launch a Groupon clone with …
the story of 2 unethical entrepreneurs that clone groupon and cybersquat on their name...
Missed subhead opportunity
Scoopon poop on Groupon
So that's another cost Groupon will have to cover before they are making profit
Something tells me quite a few people will make out when Groupon goes to IPO.
But the prospective stockholders will probably *not* be one of them.
the problem with groupon...
is that it's such an easy business model to copy with very low barriers to entry..
You don't need fancy technology or intellectual property or software patents like google..
You don't need to have a huge userbase before you can make a profit through selling adverts, like facebook....
You just need to ring up loads of businesses and agree on the cut you will take for any offers the business wants to sell through your site.
It's not surprising there are loads of copycats and I wonder how long groupon remains the market leader..
In fact as was stated on an article on here a few weeks ago (or maybe it was bloomberg.. don't remember) there are many worries about whether the business model can every be profitable
If all you need to do is
"ring up loads of businesses and agree on the cut you will take", how come it's not profitable? Are the returns on each offer, laughably low?
letters / digits
No.. I think Groupon takes around 50% of the voucher value..
However, I believe, Groupons lack of profit thus far is mainly due to their incredibly rapid international expansion..
As long as they are the "goto" guys for businesses wanting to promote offers they will eventually make money..
However there is nothing to stop someone with money to burn copying their business model and offering deep discounts to all the businesses that want to do offers.. then groupon runs out of offers to offer and money and folds. Then the first company just puts their cut back to normal and recoups their money...
The other observation is that companies are starting to realise that in many cases offering deep discounts is neither profitable, nor raises repeat business / brand awareness sufficiently.. The upshot being that the number and quality of offers being made available is going to fall. If there are no offers for groupon to sell (or if people stop buying them because they are crap) then groupon will disappear
Groupon's owners seem to have made some money
I thought I saw a report talking about the owners moving large amounts of money into personal accounts... I think it was a big chunk of the nearly $1B they got at the end of 2010.