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July 25 2012


Groupon investor NEA raises a huge $2.6b fund

Business Insider :: New Enterprise Associates, or NEA, one of the largest venture-capital funds in the world, has raised $2.6 billion for its latest fund. It's the third fund raised by NEA that exceeds $2.5 billion—which is a big number for the venture-capital world, even in a time when billion-dollar funds are becoming less unusual. NEA now has $13 billion in committed capital.

NEA on Twitter

A report by Owen Thomas, www.businessinsider.com

Tags: Groupon VC

April 16 2012


.@suryasays: The less discussed, other sinister plot at Groupon

SuryaSays :: Groupon has taken the entire ride. From wonder boy CEO and “fastest growing company ever” to becoming the evil company out to defraud merchants/investors. Now that I’m no longer directly affiliated with the company (other than being a locked-up shareholder), I thought it would be nice to provide a little balance. There’s plenty that’s been said on the negative side of the ledger — no doubt inspired by a righteous desire to protect the little-guy merchant and investor and not at all fueled by a desire for twitter followers or endless TV appearances.

[Surya Yalamanchili:] People and companies are always one or the other. We glorify when it’s smooth sailing and bash mercilessly during turbulence.

Groupon is a strange company. It just is.

Inside - Continue to read Surya Yalamanchili, suryasays.com

Tags: Groupon

'Material' weakness: The Groupon deflation, charted

The Next Web :: What has been going on at Groupon? Two things, roughly. The first, a public statement from its accounts to the effect that the company has ‘material’ weakness in its financial controls. For a freshly public firm, that is a breath of rot. And secondly, a wave of negative press. The Next Web, or TNW, mostly, or completely under my pen has written has been recently critical about the company. I’ve been joined with voices around the tech writing community, expressing either alarm, or at least worry about how the company is operating.

Details - Continue to read Alex Wilhelm, thenextweb.com

Tags: Groupon

March 30 2012


LivingSocial co-founder and president has stepped down

Startup Stats :: Eddie Frederick, President and Co-Founder of LivingSocial, has stepped down from the board according to an email sent out from CEO Tim O’Shaughnessy. LivingSocial is the direct competitor to Groupon, which went public late last year.

Continue to read Nick O'Neill, startupstats.com

Tags: Groupon

January 16 2012


"Goofy" Groupon CEO Andrew Mason defends his decisions on "60 Minutes," CBS

AllThingsD :: Groupon CEO Andrew Mason said there’s things he would have liked to do differently and would have liked to have avoided, but that he’s mostly done a good job leading the rocket ship of a company. In a piece by Lesley Stahl of CBS news show “60 Minutes,” she interviewed the leader of the Chicago-based social buying company in his first national appearance since the company’s initial public offering. Of course, Stahl asked hard-hitting questions about the fishy revenue figures and the questionable accounting practices that preceded the IPO.

Continue to read Tricia Duryee, allthingsd.com

Tags: CBS Groupon

January 04 2012


Can Groupon, LivingSocial and Co. generate more loyal customers?

The article doesn't provide with any kind of evidence that this is really a trend. There are many other reasons, why people won't come back. Who knows. For sure more indepth research is neaded. 

Business Insider :: A LivingSocial customer told the story of how, after he did his deals, none of the LivingSocial coupon-buyers became regular customers. They were also generally much more of a pain in the ass to deal with than his regular customers, despite eating at his restaurant at half price. And, meanwhile, some of his regular customers who also bought the coupons paid half-price when they would have paid full price. So the customer, who also owns an e-commerce business, said he will never use a daily deal site again.

Continue to read Henry Blodget, www.businessinsider.com

Tags: Groupon

September 15 2011


Marketwatch - Social media users: passion for daily deals rapidly cooling?

Marketwatch ::  A sentimental analysis report from Amplicate (unfortunately not available for free) found that 86% of comments posted on social media about deal websites were positive over the last 12 months. But social media users were much less positive in the second half of the year than in the first. 93% of comments on deal websites were positive in the first six months, compared with 81% in the last six months.

Continue to read www.marketwatch.com

Access the report [$|€] amplicate.com


Weather forecast: heavy clouds no rain yet? Groupon through the Glass Door

BetaBeat :: Employees of the daily deal giant have filed a class action lawsuit claiming Groupon failed to pay them millions of dollars in overtime pay. It’s another blow to an already shaky company, whose accounting is being questioned by the SEC. Groupon cancelled its IPO roadshow earlier this week.

Continue to read www.betabeat.com

August 28 2011


Henry Blodget says AllThingsD's Kara Swisher helped Groupon violate SEC quiet period

BetaBeat :: Henry Blodget is a tech blogger at Business Insider. He pointed out what he saw as a suspicious series of events. Groupon, which has filed for an IPO, has been taking a lot of heat from both the press and the SEC over its unique accounting methods. Because of the SEC’s “quiet period”, which prohibits companies who have filed for IPO from promoting themselves, Groupon cannot defend itself publicly.

[Henry Blodget, Business Insider:] The clever method Groupon is using to try to get around the SEC’s quiet period rule is writing a detailed public communication in the form of a CEO “letter to employees” that Groupon has then distributed publicly with the help of a trusted media outlet.

The media outlet in question is All Things D and the reporter is Kara Swisher.

[Kara Swisher, AllThingsD:] Henry never called me to ask how I got the email, as is his usual practice. I would not have commented I guess, but a call would have been nice before writing that out of thin air. So not sure how to respond, except that he always seems to publish nearly each and every memo I manage to get, in any case. ...

Continue to read Ben Popper, www.betabeat.com

Original piece written by Henry Blodget www.buinessinsider.com

August 03 2011


Twitter valued at $8bn after large investment from DST Global

Guardian :: Twitter, the microblogging website that lets users tweet messages of 140 characters or less, is now worth $8bn (£4.9bn). The firm's new price tag comes after a $400m investment in the loss-making venture from serial social media investor DST Global,  the investment fund led by Russian billionaire Yuri Milner, which also owns stakes in Facebook, online gaming firm Zynga and discount firm Groupon, all of which have plans to go public.

Continue to read Dominic Rushe, www.guardian.co.uk

July 12 2011


Why Groupon or LivingSocial? - Will banks take over daily deals business by selling customer data?

Dan Rowinski :: Daily deals sites like Groupon or LivingSocial do not have massive amounts of data about their users, but banks. The banking industry has launched a new initiative that will bring deals and discounts to consumers through the banks themselves. Banks have begun selling consumers' personalized information to merchants who in turn offer deals based on spending habits or other criteria.

Continue to read Dan Rowinski, www.readwriteweb.com

July 10 2011


Groupon updates its privacy rules, mobile tracking and sharing now included

AllThingsD :: Groupon sent out emails to its users this weekend, about changes it has made to its privacy statement and terms of use. Among the most notable changes is more information about the Chicago-based social buying start-up’s collection and use of mobile location information.

What will change? - If you use a Groupon mobile app and you allow sharing through your device, Groupon may collect geo-location information from the device and use it for marketing deals to you and for other purposes listed in the “How Groupon Uses Personal Information” section of the Updated Privacy Statement. In short: you will be tracked.

Continue to read allthingsd.com

July 05 2011


Google Offers versus Groupon: The Portland throwdown. Who will make it?

TechCrunch :: Google Offers just finished its first month. Google has been testing its Groupon compete in Portland and I’ve been closely tracking the results. Doing a head-to-head comparison like this is a bit difficult because the two companies run deals differently. Groupon runs multiple deals each day. Many Groupon deals span multiple days, with some running for three days. Google Offers on weekends ran for two days. For each run, Rocky Agrawal, TechCrunch, picked a representative deal from Groupon and compared it with the deal from Google.

Continue to read - a comparison by Rocky Agrawal, techcrunch.com

June 17 2011


Why Groupon's business model won't work

TechCrunch :: Businesses are being sold incredibly expensive advertising campaigns by Groupon that are disguised as “no risk” ways to acquire new customers. In reality, there’s a lot of risk. With a newspaper ad, the maximum you can lose is the amount you paid for the ad. With Groupon, your potential losses can increase with every Groupon customer who walks through the door and put the existence of your business at risk.

"Why Groupon Is Poised For Collapse" - continue to read Rocky Agrawal, techcrunch.com

June 04 2011


Google vs. Groupon: Groupon-like Google Offers begins testing in Portland

New York Times Last year, Google tried to buy Groupon but failed. So Google now hopes to beat Groupon. Eric E. Schmidt, Google’s executive chairman, said Tuesday that the company would begin testing Google Offers, a Groupon-like service delivering discounts from small businesses, starting on Wednesday in Portland, Oregon, U.S.. The test will be expanded to San Francisco and New York this summer.

As the company indicated earlier this month, Google Offers will be tied to Google Wallet, a mobile application that allows people to use their phone to pay for purchases.

Continue to read Miguel Helft, bits.blogs.nytimes.com

June 02 2011


Groupon files for IPO to raise $750m ... but lost $113.9m in QI-2011

AllThingsD :: Groupon has filed for an initial public offering with the SEC seeking to raise $750 million, making it one of the largest offerings in recent memory. Proposed symbol is “GRPN,” and Morgan Stanley, Credit Suisse and Goldman Sachs are its bankers. Groupon disclosed it has 7,000 employees, 83 million subscribers across 43 countries. As the leader in the group-buying daily deals market, it said a bulk of its sales are coming from health and beauty segment and food and drink. What’s astonishing the company is not profitable on a GAAP basis, losing $389.6 million in 2010 and a $113.9 million in the first quarter 2011.

Via @holgerschmidt, @Wissenssucher

Continue to read Tricia Duryee, allthingsd.com

December 22 2010


Amy Webb: The IPv4 problem, geofencing, and lots of hyperlocal

Editor’s Note: We’re wrapping up 2010 by asking some of the smartest people in journalism what the new year will bring.

Here’s digital media consultant Amy Webb of Webbmedia Group, on hyperlocal startups, tablets, geofencing, and more.

Every device that connects to the Internet, from mobile phones to MiFis to computers to TiVOs, needs a unique ID number (also called an IP address) in order to make contact with other devices on the network. The world will run out of addresses by March 2011. This means that for those in developing areas like China and India who finally have access to technology, they won’t be able to get online. But it also means that large-scale U.S. providers such as Comcast won’t be able to support new customers as they have in the past. Why? Our current standard, IPv4, is the Internet Protocol developed in 1981. It’s been 30 years, and we’re out of numbers. The next iteration is IPv6, which is ultimately more secure and is much more extensible. Eventually, ISPs will have to make the switch and migrate all of their customers. However, those people connecting via IPv6 won’t be able to access content that’s being housed on IPv4. The New York Times, Washington Post, CNN, NPR, local blogs — basically any content producer who hopes to continue reaching a worldwide audience — will either have to start migration now or will face losing millions of visitors starting Q3 next year.

Lots of new hyperlocal initiatives will launch before summer 2011 by a vast number of traditional media organizations. Millions and millions of dollars will be spent recreating templated sites based on zip code or geography alone. All of the local ad dollars being counted on will instead shift towards social commerce sites like LivingSocial and Groupon, which have started to include compelling editorial content. Interest among journalists will grow, while consumer interest continues to stagnate. Only the hyper-personal sites that focus on niche content and geography rather than neighborhoods alone will succeed.

2011 will be the year of the tablet. We’ll see close to two dozen tablets come to market, most running some version of Android. Consumers will continue to love the iPad, while publishers will continue developing what is essentially a web-centric experience for a device that does much, much more. Smart entrepreneurs will leapfrog traditional news organizations by focusing on dynamic content curation via algorithm. Think Pulse 2.0, Flipboard, Wavii — but even more engaging.

Geofencing will become an integral part of the checkin experience in 2011. Right now, many mobile social networks use a fuzzy radius to locate members, and it’s easy to game the system. But it’s also harder for retailers and others interested in social commerce to effectively use networks like Foursquare and Gowalla because it’s difficult to verify that a user is actually inside of a store or at a specific location. For news orgs trying to syndicate content, the best many can do now is to leave vague tips around town. Geofencing technology requires very strict location parameters, allowing a number of interesting possibilities. For example, check-ins can be triggered automatically, expiring assets (such as event tickets or breaking news alerts) can be pushed to users, and a moving target — like a parade or car chase — can be tracked or commented on. And with geofencing, someone can’t check into his favorite restaurant repeatedly while driving past it his way to work.

Data-filled firehoses will spring leaks everywhere in 2011. And not just WikiLeaks. Twitter is releasing a personal metrics dashboard soon. Other social networks are discussing how to release data streams about and for their users and the content being discussed. News organizations will soon find a fantastic opportunity to harness all of that data, to parse it, and to develop stories about everything from the U.S. government to our cultural zeitgeist. DocumentCloud is a breakthrough, an essential tool developed by journalists for journalists. I hope to see more of its ilk released in 2011.

December 15 2010


Dave Winer: There’s no good place for a new Maginot Line for the news

Editor’s Note: We’re wrapping up 2010 by asking some of the smartest people in journalism what the new year will bring.

Today, it’s web pioneer Dave Winer, a man key to the evolution of many of the publishing technologies we use online today, currently a visiting scholar in journalism at NYU, and half the team behind the Rebooting the News podcast.

When people in the news business try to figure out how to make news pay after the Internet, it seems analogous to the French, after being invaded by Germany in World War II, trying to figure out where to put the new Maginot Line.

The Maginot Line would have been a perfect defense in World War I. It didn’t help much in the second war.

Analogously, there was a perfect paywall in the pre-Internet news business, the physical product of a newspaper. There is no equivalent in the new distribution system.

Howard Weaver’s latest post put this into focus for me. That, and the recent attention on Groupon, which it seems to me has usurped, again, one of the big roles that local news organizations could have played, obviating the need to find the new paywall.

It isn’t really a question if you’ve created something worth paying for. It might be very good, and expensive to create. What matters is if there’s a market for it.

The people in the business of creating fixed fortresses might have asked the same question after WWII. We could make a much better Maginot Line now, we know so much more and technology is so much more advanced. Wouldn’t matter, because France wasn’t in the market for a new Maginot Line.

That’s the question news people never seem to ask. How can we create something that has a market? If they asked that question instead, they would restructure their activity. Because there are things similar to news that have generated huge wealth. Not hidden, in plain sight.

The first usurpage was of course Craigslist. It wasn’t so obvious then that this was the natural domain of the press, because Craigslist made a small fraction of the money the news industry used to make from classifieds. It looked like CL was just undermining the press, not competing with it. But Groupon — this is the fastest-growing company of all time. The founder says what they do is find ways for people to get out and enjoy their city. And they make a boatload of money doing it.

Here’s one way of looking at what both Groupon and local news organizations do — they put smart hard-working people into the field to keep tabs on what people in the community are doing. Some of what they are doing is robbing and killing each other — that’s what news is interested in. Another part of what they’re doing is buying from and selling to each other. Groupon is making huge bucks on that.

It seems there’s still time for a philosophy change in the news business. Become more focused on the commerce of your communities, and the opportunities to make money will become more apparent. Seems like common sense to me.

December 02 2010


The Newsonomics of Google Grouponomics

[Each week, our friend Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of the news business for the Lab.]

It wasn’t supposed to be this way. Newspapers were the kings of coupons, the best source for getting the daily deal, on any kind of local product or service you could imagine. Over the years, direct (mailed) competition came along, taking business from newspapers. Now, it, has been further eclipsed by the sheer cost savings of digital coupons, which rose 60 percent within the last year.

In that context, Groupon was an idea just waiting to come along; and the remorse being expressed in newspaper buildings across America this week is the same: Why didn’t we come up with that idea? The remorse should go deeper; check out the Groupon Merchant Services page, and try to find a similar one, with similar marketing support, offered by a newspaper company online. In fact, Groupon’s whole pitch to merchants, cheerfully animated in its Grouponomics section, is a textbook lesson in selling local.

Now, if gobbled by Google today, or as the company moves into play, Groupon is set to become a big local ad play. In the Google portfolio, it could be the on-ramp to an eight-lane gateway, as Google widens its reach into local business marketing and local merchants get introduced to Google, through Groupon’s simple couponing pitch. As I noted last week (“The newsonomics of eight-percent reach“), Google’s reach into the small- and medium-sized business community in the US is about 8 percent, leaving more than 23 million businesses as potential clients. Get a bigger piece of that growing digital marketing play — estimated to be $16.1 billion by Borrell Associates — and you’ve got a big growth engine to add.

In fact, think of Groupon as Google’s new gateway drug. The Groupon inventors did the R & D, and now Big Search (aka Big Ads) is coming along to greatly expand its market reach and penetration. Groupon makes entry to local merchant markets simpler, and that’s the key to the $5 billion or so purchase price (“The newsonomics of simplicity“).

Certainly, we can tick off the reasons why the Google/Groupon deal makes sense for Google:

  • It’s a growth strategy. As paid search inevitably matures, Google needs to stoke several new engines of growth to keep the topline growing. Groupon has scaled to $400 million in sales in two years, and clearly has lots of potential.
  • It’s a search strategy. What could be better to add to keyword results than a single, relevant deal of the day? You want relevant ads? Nothing’s better than a relevant, geo-targeted coupon on something you just searched for.
  • It’s a social strategy. The deal is an in-your-face move directed at Facebook, as it connects up the web of relationships to buying.
  • It’s a mobile strategy. As the world moves mobile, tablets proliferate, and Google’s newly federally approved AdMob ad network looks to 2011, a simple daily deal can make the most of location-aware shopping.

All those are true. Yet Google has made more than 40 acquisitions this year, and none has approached this purchase price. So the gateway factor here, I believe, is the big difference-maker. In 2010, the power of a simple, great daily deal, well-delivered, breaks through the digital clutter — and provides the way into the wallets (and hearts) of local merchants.

Talk to those selling digital products to local merchants, and they’ll tell you it’s a slog. Yes, it’s working. All those 25 million merchants are experiencing the angst of marketing transition. They know they need to be in digital, but how do you work this search engine marketing, appear in the right places on the smart phone, play Facebook? It’s a slow go. Some merchants are digitally savvy, but most need the fundamentals explained, packaged, and demonstrated. That takes time. It’s not only newspaper sales managers that tell you this; it’s also what Google sales managers have said as they’ve tried to figure out the quickest way into local.

There may be nothing quicker than saying: How ’bout we do a coupon? Those six words could open the door wider and more quickly. Once through the door, Google, of course, can offer its growing array of paid search (Ad Words), display (Double Click) and mobile (Ad Mob) products, and ease businesses into the wonders of Google Analytics.

Figure that $5 billion price is worth it, if it ignites the local market sales more quickly, and acts as a gateway drug. Therein we can see the newsonomics of Google Grouponomics. How quickly can Google double its, maybe, 1.5 million merchants? Let’s say those additional 1.5 million merchants spend only 25 percent annually of what the first 1.5 million spend, which is about $27 billion a year, at the 2010 run rate. (A quarter as much might make sense, because many of the first set of advertisers are big, national ones.) If it could double its merchant base two years earlier (than it could if it didn’t buy Groupon), that might mean an additional $13.5 billion in revenue ($6.75 billion a year from the second 1.5 million advertisers). Suddenly, the $5 billion price is understandable.

The big question: What’s it likely to mean in local newspaper markets? How will it change an emerging balance of sales power?

Already, newspaper companies have taken a more catholic approach to local ad sales. Much of the Yahoo-related money they’ve taken in comes from selling Yahoo.com ads in their area, in addition to their own site inventory. A number of companies are reselling Google ads in their own markets, trying to leverage the power of their feet-on-the-street sales force and their well-known community brands.

Consequently, in addition to the why-didn’t-we-do-that remorse they’re feeling, they’re wondering how the Groupon deal will change the local sales landscape over the next couple of years.

A few scenarios:

  • Doomsday: Google’s use of Groupon as its new stalking horse lets it dominate local online spending as it has with national paid search. Newspaper online ad growth — newspapers’ only growth engine — slows against the competition. Newspapers’ Sunday circulars — based on price/item sales — become more obsolescent, as they are replaced by niched and customized deals of the day, not just a single day of the deal available to everyone.
  • Google replaces Yahoo as the partner of choice: The Yahoo consortium looks fairly mature these days, bringing in some good revenue for several top sellers. Yet it’s plagued by Yahoo’s ongoing identity crisis and Carol Bartz’ less-than-full backing. So Google could become the new best friend of newspapers (and broadcasters and Yellow Pages companies), enabling them to sell Groupon-led digital deals, and supplant Yahoo (which itself tried to buy Groupon earlier this year for a reported $2-3 billion) out of the local game. There’s precedent, with some of those newspapers already reselling Google paid search, and the higher sellers getting monetary incentives to do it. So Google could take a largely go-it-alone strategy, selling coupons-plus itself; or fully partner with local salesforces — or, third and probable choice, pursue a hybrid strategy for now, as it increases local penetration.

Among the big questions here: How would Google value the power of local feet-on-the-street, compared to cheaper telesales and self-service? Local sales forces have been vital to the newspaper/Yahoo initiative, and to Groupon’s own growth. Check out Groupon’s employment page (especially “Sales and Business Development — Outside,” to use industry vernacular), and you can see the value it places on feet-on-the-street. And yet Google has built its empire largely on self-service, and would like to do that into the future, increasing margin. Who else wants to turn coupons into self-service? Well, Groupon. Within a week, it will unveil its own Groupon self-service offering.

So, much of this deal, its value to Google, and its threat or promise to newspaper companies may come down to simple question: What do you need to sell a digital coupon to a local merchant?

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