Comments on: Groupon’s idea of going quiet A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: CarlaOlson Thu, 23 Jun 2011 06:21:42 +0000 Groupon has been hiring a lot lately ( and going after Silicon Valley’s top talent… and launching great new products. The Rocky dude can complain as much as he wants, but the business won’t stop. It’s a great value proposition for both consumers and merchants.

By: Curmudgeon Tue, 21 Jun 2011 17:55:15 +0000 @econp: That’s the problem; after the Internet has done a really good job of eliminating middlemen in just about every industry it has touched, Groupon, et al want to re-introduce it. I just don’t see it as anything more than an experiment waiting to fail.

Look at it this way. You can argue that the only significant value Groupon brings to commerce is its mailing list. Look how well that’s worked for the traditional publishing companies. There may be a role for Groupon here, but the email list will have to be valued at aquite a bit less than it seems to be today.

By: jomiku Tue, 21 Jun 2011 15:23:13 +0000 I now get daily deals from nearly 10 email sources. Just scanning my mailbox from today I see Groupon, BuyWithMe, Bloomspot, LevelUp, LivingSocial, RueLaLa, NewEngland Perks and Yipit (aggregator). There are a few more.

Since they are distributed by email, they can develop a large list quickly. A 50% fee seems a lot to expect over time.

By: econp Tue, 21 Jun 2011 11:39:59 +0000 “In this, Groupon’s interests are not aligned with either merchants or consumers. With merchants, indeed, the interests are almost diametrically opposed: the greater the proportion of total revenues that Groupon takes, the less well the merchant does.”

Not sure that this quite right – both Groupon and merchants care about the absolute level of revenues rather than shares.

“And consumers will always prefer an offer with a low up-front cost, while Groupon wants to maximize the up-front spend, since that’s all that Groupon ever sees.”

Not sure that this is right either, if consumers don’t take up the offers that’s not great for Groupon or consumers. Both have an interest (as do merchants) in offers that are taken up.

This is illustrative of one of the beautiful ideas of internet advertising – merchants want to get hold of interested buyers. Buyers want to get offers that they care about. Intermediaries (Groupon, google etc) want to provide services that attract participation. Outcome – a massively valuable industry!

By: absinthe Mon, 20 Jun 2011 23:38:21 +0000 Even Agrawal’s smartest points are horribly phrased.

It’s not a freaking auction. Just because they’re partnering with the most desperate merchants doesn’t make it so. If supply is constrained and your competitors are still catching up, it’s obvious that you’re going to extract high rents. It’s not an auction unless you’re, you know, running an auction.

If you really stretched, you could argue there’s some underlying Walrasian tatonnement auction or something. But then there wouldn’t be anything special about Groupon’s success.

By: Piesmith Mon, 20 Jun 2011 23:37:38 +0000 I think people will get bored of groupon and move on.