All it “owns” is an idea (i.e. online coupons), and a not particularly revolutionary one at that.

Ten years from now people will be listing Groupon’s decision to turn down Google’s buyout offer as one of the most boneheaded financial decisions ever.

Important to read the full analysis and see how the conclusions are drawn, in my humble opinion.

Would these not be the businesses that can AFFORD to sell their services at a 75% discount? For anybody else, it has to be treated (and judged) as a loss-leader.

The BIG QUESTION is whether Groupon does enough to justify the fees they charge. Sure, they splash a deal out there to a million people in a 30-mile radius of your business. But are there not cheaper forms of advertising? Buy the front page of the community newspaper and offer customers 50% off on Saturday. You’ll get traffic out of that, and the ad likely won’t cost you ANOTHER 20% of your day’s sales.

If Groupon wants to charge higher-than-industry fees for ad placement, then they need to justify that with better targeting of those ads. From what I’ve seen, they make no effort to target.

That’s right! Take that, Felix, you geezer. When Felix was first out on his own, he had to use newfangled “ATM machines” to get cash and pay for stuff at the non-big-box stores. You had to fend off dinosaurs with a burning stick to get into these stores. But electricity had already come to the British Isles by then, so at least they had refrigeration.

That’s right! Take that, Felix, you geezer. When Felix was first out on his own, he had to use newfangled “ATM machines” to get cash and pay for stuff at the non-big-box stores. You had to fend off dinosaurs with a burning stick to get into these stores. But electricity had already come to the British Isles by then, so at least they had refrigeration.

For all its customer acquisition and marketing costs, Groupon doesn’t own its subscribers in any real sense, hence the buzzsaw at the SEC over the phony-baloney profit-before-expenses accounting. They have an email address and no loyalty. Kind of like a john thinking the hooker is really into him (or do I mean the other way around?).

The problem it seems, that with time, the offers get progressively dull — near-daily facial, pedicure and massage offers.

But I think it’s also conventional wisdom at this point that Groupon is going to crash because its business model is not defensible, and that the businesses that are placing coupons are probably mostly losing money and not getting enough return to make up for it.

When I first joined I used to buy something every few days/once a week and generally for a group of us. In the last 3/4 months though the offers have become horrendous.

The locations are quite often badly wrong; London deals have quite often been situated in Essex/Surrey/Kent, and the deals in them areas are actually in London. Then for Cardiff the offers are for places 2/3 hours away ranging from west Wales all the way up to the valleys.

Then as you mentioned it has become far more feminised. When I first joined there were plenty of restaurant deals, comedy nights, photography courses, sailing etc… Nowdays the majority seem to be stylists, fake tans and hair removal.

So rarely was there anything worth actually buying that it isn’t worth visiting most days anymore, and after the way they spammed my email there is no way I am relying on that instead.

Go back six months, Felix, to the discussions on this blog about Groupon. I said then that the model is inherently unstable. That everyone eventually gets stuck with a Groupon or two, and that sours them on paying upfront for something that may never happen.

That means you burn through your customer base over time. That and the complete randomness of the coupon offers are such a turn off now–liposuction one day, cooking school the next. Whatever. It’s as if the Girl Scout’s did so well in your neighborhood that they decided to knock on your door every night: want some porn? how about a pepperoni pizza?

I said it then and I’ll say it again: they shoulda taken Google’s offer. Colossal Hubris.

That being said, its offerings have gone downhill pretty quickly and the competition is fierce. It is already losing the quality battle, offering lots of picture frames and crappy asian food. It will be tough to reorient themselves at this point, with so many competitors breathing down their neck.