Groupon should have accepted...
Not only they are unlikely to get such an offer again, they now have a rival who can spend without counting... And who has a grudge.
Google abandons tradition to bring you this Important Voucher
Google's reputation for sound judgement took a serious knock last year when it emerged it was mulling a $6bn bid for Groupon. The web voucher sensation is running on exhaust, and racing towards an IPO before faith and cash reserves expire. Legal issues lurk beneath the surface, and Groupon needs merchant partners to keep buying …
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Friday 2nd September 2011 17:10 GMT Kristian Walsh
Won't be sad to see Groupon go. Hope Google get burned too...
Talk to anyone in a small business and they'll tell you stories of Groupon overselling deals, or not following the agreed schedule. One place I heard had nearly all of the 3,000 coupons it had agreed to presented in the first week of what was supposed to be a six-month campaign. The result was chaos - supply costs for these offers destroyed their cash-flow. They couldn't fulfil all the orders at once, and as most users of Groupon are already customers of the business in question, the business ends up disaffecting its most loyal customers. Sounds hot, where do I sign?
Also, less of a problem on this side of the pond, but in the US, there's a tendency for customers to tip on the basis of the post-coupon price, rather than the value of goods. This is a major issue for service staff, who rely on these tips for their income.
The sad thing is that when they go (and it is "when", not "if" - they're technically insolvent as it is; if they miss their growth targets they're dead), they'll take a lot of small businesses with them.
I just hope that the experience will prevent other businesses getting burned by the coupon scam.
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Friday 2nd September 2011 20:56 GMT Timo
This place reminds me of Priceline.com
Priceline.com was the darling of one of the previous web hysteria/bubbles. Now they're not much more than an average travel website. Expect the same for Groupon. I don't think the savings work out very well for the consumers either, what with most of our friends having not used a deal before it expired. Won't have to get burned too many times for people to shy away from the DEALZ OMG.
(Remember when you could bargain for gas on Priceline?)
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Saturday 3rd September 2011 16:00 GMT DrXym
Priceline
Priceline is still around though. It's probably because their underlying business model was viable.
I don't see any indication that Groupon has a viable model. They've burned through a lot of businesses and words has spread. The majority of "deals" these days are really rock bottom things - car washes, eye brow waxes, teeth whitening, public speaking courses etc.
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Monday 5th September 2011 10:11 GMT DrXym
Google does have an advantage
Google and I daresay other daily deal sites like repeat business and good word of mouth. Ultimately they'll make more money from a smaller % by having businesses use their service over and over and telling their friends to as well.
Groupon apparently has adopted the slash and burn approach. There are enough horror stories online of businesses losing thousands from shouldering the burden of fulfilling massively oversold numbers of groupons. I think the only reason many business would want to use Groupon is if they're about to go under anyway. Receiving staged payments even for a fraction of what they should get might allow the business to get through a bad patch and if not, well the business was going to fail anyway.
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Biting the hand that feeds IT
