Comments on: How to justify Groupon’s valuation A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: essay writers Mon, 13 Oct 2014 11:44:55 +0000 The Derby war, Yaya Toure knee score, Aguero plum to open two degrees, Negredo two assists, Navas right-sided over Manchester United also serve a assists, Nasri in addition to their own goals, invigorated the team’s offensive

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By: TFF Sun, 30 Oct 2011 13:11:32 +0000 Agreed with 2contango. Groupon’s business model relies on:

(1) The willingness of restaurants and other businesses to offer a 75% discount in the hope of attracting repeat customers at the full price.

(2) The inability of competitors to elbow in and offer either restaurants or consumers a better deal.

(3) Cutting costs sufficiently to turn an operating profit.

I’m personally puzzled at their inability to turn the 75% discount into a profit. Admittedly they pass the majority of that along to the customers, and spend even more on convincing new customers to sign up with them, but it shouldn’t be THAT expensive to attract business. And if it is, then your business might not be as promising as you hoped.

A month ago we received a Groupon (actually a look-alike competitor) offer for a local restaurant that we’ve already visited a couple times and enjoyed. Still didn’t bite because the setup ultimately seemed to be more hassle than it is worth.

Will be hard to build a $10B business on that.

By: Frwip Sun, 30 Oct 2011 03:34:41 +0000 @TFF

Nope. Not interested. Even for the low, low price of $50.

By: 2contango Sat, 29 Oct 2011 22:10:33 +0000 Analysis of Groupon typically leaves out the crucial role restaurants play in determining Groupon’s future. Without their participation, Groupon in dead. So the real question is can Groupon keep restaurants happy?

Restaurants view Groupon as a straightforward marketing expense. They lose money (and Groupon gains money) on coupons and they hope they will get customers to sample their offerings and become repeat, full-paying customers, thereby covering this initial marketing expense.

The question is whether or not this is cost-effective for restaurants. (They have plenty of other marketing channels they could use.) Attracting only coupon users is a recipe for bankruptcy. So they have an incentive to keep coupon use to a minimum. And if enough Groupon users don’t turn into full-paying customers, restaurants will pull out and Groupon will be dead, regardless of how many customers Groupon has or how well consumers like it.

By: richardwmay Fri, 28 Oct 2011 19:43:47 +0000 Groupon is the internet equivalent of newspaper coupons. It’s nice to receive Groupon’s daily promotional email, but seriously, don’t they have anything better than pizza, Italian restaurants, spas, yoga and teeth-whitening specialists to promote. Doesn’t seem to me to be a sustainable business model with some serious competitors lurking in the background. They should have taken Google’s offer. Now they are just red meat!

By: joelseearr Fri, 28 Oct 2011 18:28:39 +0000 Just today, I got an email inviting me to use “Groupon Reserve”. This is basically Groupon’s version of Gilt City; discounts for high-end restaurants and services. What’s interesting is that it highlights a bigger problem for Groupon, which is the failure to capture multiple retail markets when they had the chance.

On the upper end, you have Gilt City, Bloomspot, and I’m sure many others.
On the bottom end, you have tons of competitors.
On the middle, you have Livingsocial, plus Google and Amazon muscling in.

Groupon was first to the largest market, but they were behind Livingsocial when it came to buying into the travel market, they were behind Scoutmob when it came to the mobile market (the failing Groupon “Now”) and they are behind Gilt City, etc. when it comes to the upper end market.

They can still grow and do well, but I’m sure all this competition means that they’ll have to be a little more merchant-friendly. Right now, I’m seeing increasing numbers of desperate low-end retailers on Groupon, especially in Groupon Now.

By: IQMS Fri, 28 Oct 2011 17:51:08 +0000 Don’t

By: jtemujinw Fri, 28 Oct 2011 17:31:58 +0000 Another issue: Groupon’s common stock comes with extremely limited voting rights, so the bull case must substantiate the credibility of management. Does anyone want to do that?