I guess they aren't alone: http://money.cnn.com/2011/11/23/technology/groupon_stock_plu... Linkedin, Angie's List and Pandora are also swirling the bowl. I'll say this: I have an offer from Google Local this morning, and another from Amazon Local. I'd probably have one from Woot local, but they aren't in LA yet. Groupon is different how again?
I have a feeling that Foursquare and Yelp are going to break into this, but instead of getting emails, they are just going to notify you if there are any deals around you. I might be a bit more inclined to use something like that. BBC: http://www.bbc.co.uk/news/business-15574954 "How do you sustain a model where on average the customer, not the person who buys the coupon but the business itself, loses money? "You get companies that don't know any better, they lose 10 grand, and they don't come back."
The real problem is that in order to be profitable in the long run they'd have to dominate their sphere. I'm already getting groupon-like offers from Amazon, and I'm already getting groupon-like offers from Google. I'm pretty sure both Amazon and Google are playing with it to see if there's any point, but either one of them could annihilate Groupon without breaking a sweat. The only strategy that makes any sense for a Groupon investor is hoping Yahoo or eBay pays way the fuck too much for it in a desperation move because they were too stupid or lazy to come up with something like it or "as good as it" on their own, a-la Paypal, only without Groupon being the dominant piece of the market. That said, it's trading at bloody 26 right now.
They sell coupons. Everyone has heard of Groupon. Where can they possibly go from there? The types of businesses that can do a Groupon are limited. It's not like my local Ford dealer is going to have a Groupon on Focuses. Surprise, surprise, here's my local Groupon today: Relaxation & Ultimate Bodywork (RUB) – Ann Arbor How many massages do you need? This might say something interesting about the massage industry, however. This stock will be played as it goes up, and down, and down. The investors got theirs, and now the market makers have a new toy to play with for a while. Fuck, I'm going to start seeing Google Offers in my G+, aren't I?
Same with services. How many massages do you need? Well, if your insurance covers it, sometimes two a week. Even if you don't, some people will treat themselves to a massage every week. Mani/pedi? Same deal. Thing is, though, this business model is covered quite nicely by junk mail. As far as I'm concerned, Groupon - even more than Facebook - is an example of the dotcom bubble reinflating. This shit can't continue.
I had a friend that owned a bar and always had a $1 PBR on tap. The bar next to his charged 3$ a PBR. The bar next to him was always busier and the majority of the people at his competitors bar were drinking PBR's. Why didn't they come next door to him? Because his service sucked. Too many merchants are looking for a "silver bullet" to help drive revenue. It's no secret though, focus on your product and your service, throw in some targeted marketing and good things will happen. Groupon and FB pages for the most part don't do shit.
>At the end of the summer, Groupon announced that in spite of revenue gains, it was still showing staggering net losses of $102.7 million for both the first and second quarter of 2011, a figure that was nearly three times the $36 million loss from Q2 2010. Their strategy is essentially to take their investment rounds and go 'all in' on advertising to boost their subscribers as much as they possibly can. I suppose then the plan will be to cut the that down once they have a critical base of subscribers established to bring good revenue in. That's the theory anyway. I think they are in the act of imploding. They've lost billions in valuation in the lead up to their IPO, which was postponed.
So are stocks gambling? For sure, no doubt about it. Are the odds more in your favor than a black jack table? Well, that depends on you and how much time you are willing to dedicate to learning the different avenues of revenue streams available.... in both cases really.
Stock Broker: Have you heard about the next big web company going IPO? Mrs. Smith: Which one? I don't follow the web too much. Stock Broker: Groupon, they are shifting the paradigm on how people advertise and shop. Mrs. Smith: I think I read about it on the local paper or heard it on the local news. Do you think it is going to be really big? Stock Broker: Nothing is guaranteed, but it has a good potential to be the Google and Apple of shopping. It is a great opportunity for you to get in on the ground floor.
There are no people who invest major amounts of money without a) understanding the risks of investing major amounts of money b) having major-major amounts of money and therefore losing major amounts of money is no big deal. I've known grandmothers who play the stock market. They play it because it's fun and they can make money. They can also lose money. One thing they are not is ditzy and uninformed. Ditzy, uninformed people go to Vegas.