Groupon Reject $6 Billion Google Offer ‎????

ricdes said:
pretty interesting how concepts of web 1.0 (letsbuyit.com) sites nowadays end up with a $6Bn valuation
Click to expand...

He's not wrong. Letsbuyit.com was Groupon before Groupon, and the "buyer's club" business model has been around since the dawn of time.

Letsbuyit.com has an interesting business idea: it acts as a gigantic consumers' buyers' club for consumers. By banding together, punters can get better prices from suppliers. This looks like a transfer of power from manufacturer to customer. Or is it one of those disintermediation, knock out the retailer/distributor plays? Whatever there doesn't appear to be much in it for Letsbuyit (according to the FT, it runs on margins of three per cent, for chrissake).

There are plenty of offline buyers' clubs, but it takes the Internet to get something - quickly - the size of Letsbuyit.com (more than 500,000 members scattered over a clutch of European countries).
Click to expand...

July 2000 Source Article

Kind of makes you wonder what other business models are out there that aren't maximizing their full potential in current form, but could be reimagined or better run for a much, much larger profit.
 


Just remember that Yahoo! offered to buy Google for 3 billion at one point. People may have said the same thing about Google as they are saying about Groupon.
 
dchuk said:
groupon just goofed. they were offered a ridiculous amount of money for a hard to scale, easily copyable business model by a mega powerful corporation. Stupid, bold move on their part, they'll start crumbling in less than 5 years I bet
Click to expand...

True but look at Google's track record of integrating companies they've bought - a hideous collection of fuckups! They'd have probably ruined Groupon (if it could actually get any worse).
 
By my math Google bid 7.5x Groupon's actual annual revenue for a company that runs on a replicatable business model with suspect long-term revenue figures and client retention.

Yeah, totally makes sense to walk away from that.
 
phillian said:
By my math Google bid 7.5x Groupon's actual annual revenue for a company that runs on a replicatable business model with suspect long-term revenue figures and client retention.

Yeah, totally makes sense to walk away from that.
Click to expand...


6_groupon.jpg
 
Google offers was obvious. The market is changing anyway.

What's going to happen now is the daily offer market will be filled with crap no one really gets excited about. Inboxes will be stuffed full of it.

Gilt City, OpenTable, and one of my favorite sites: Tablethotels as well as other niche luxury sites will be the ones that get all the good offers. Google and Groupon will get tons of Muffler repair and Acupuncture deals from this point on.
 
You must log in or register to reply here.
Top Bottom
Back