Groupon can suck it!

[Theo]

Google offered $6 billion dollars for Groupon, but they turned down the offer. Now, Google is going on the offensive with its own service!

 

[Nathan King]

Did they seriously think they could do better than $6 billion with their service? Sounds like they bought into their own hype.

 

[dn-101]

Groupon's biz model is not sustainable

 

[hugegrowth]

It is sustainable but it is easy to copy, especially by a company with Google's resources and list of advertisers.

 

[Gerry]

Groupon can suck it!

Do they offer a discount for a group suck?

 

[Bill Roy]

The difference for Google is that they would have picked up a ready made outfit and now they have to start from scratch and share the market place with Groupon!

 

[katherine]

It is sustainable but it is easy to copy, especially by a company with Google's resources and list of advertisers.

Bingo It's a model that can be and is replicated easily.

 

[Nathan King]

The difference for Google is that they would have picked up a ready made outfit and now they have to start from scratch and share the market place with Groupon!

Groupon's success won't last...it's not innovative enough to dominate the local coupon market. Google will take what Groupon started to the next level. Not that I'm a fan of Google's dominance in internet advertising, and I'd love to see another company rise up to challenge them, but Groupon is not the service to do it (and it makes me laugh that they think they could, given the mediocrity that they offer). All Groupon has going for them is the media hype.

 

[Theo]

The real issue is that Google does not care if they burn $6 billion - they will dominate the market regardless. That's the luxury of already being #1 in terms of data collection.

 

[Gerry]

The real issue is that Google does not care if they burn $6 billion - they will dominate the market regardless. That's the luxury of already being #1 in terms of data collection.

A very stupid move by Groupon. As many have pointed out, this is a business concept and model easily imitated and copied, especially by those that have the assets and the cash.

 

[DaddyHalbucks]

It is sustainable but it is easy to copy, especially by a company with Google's resources and list of advertisers.

You hit the nail on the head.

 

[snicksnack]

it might be easy to copy, but so are many other successful website and google tried to copy and failed, for example google video, or their classifieds...

 

[RTM.net]

The problem is that Google really knows how to (and continues to) fail miserably in everything social. They've failed in the check-in space, the microblogging space, and we'll see what they can do in leveraging their Adwords advertiser base to get in on the glocal consumer discount space.

Without infringing any further on "do no evil", of course

Rob

 

[Tia Wood]

It's not as easy to copy as you guys believe. It's more than just a coupon site. It's a group discount site that requires research and coordinating with companies. Not easy to do if you do not have the resources.

But easy for Google.

it might be easy to copy, but so are many other successful website and google tried to copy and failed, for example google video, or their classifieds...

I have a feeling that it will be different with this one. Google wants this baaaaadly.

 

[dn-101]

There is a long list of startups that decided to go alone:
Friendster
MySpace...

 

[Bill Roy]

Groupon's success won't last...it's not innovative enough to dominate the local coupon market. Google will take what Groupon started to the next level. Not that I'm a fan of Google's dominance in internet advertising, and I'd love to see another company rise up to challenge them, but Groupon is not the service to do it (and it makes me laugh that they think they could, given the mediocrity that they offer). All Groupon has going for them is the media hype.

Nathan, the problem for Google is that having had their offer rejected (was it worth $6billion, not imo) is that by entering into the same market they can now only gain a proportion of that market, if Groupon can even only maintain 25% of the market it means that Google can only achieve 75% of it. What will be interesting though is IF Google can innovate in this particular market, from past examples they do not seem to do so well.

The basic concept of the Groupon model is indeed extremely easy to immitate, but that does not mean that the immataors will be successful, yes they could buy success by literally throwing money at the venture, something Google can do with ease, but even this does not guarantee success. The overriding problem for Google is that they are now constantly playing 'buy-out' or 'catch-up' with each new successful business model that occurs on the internet, this in itself is not sustainable unless they can start innovating themselves.

Perhaps Google should be looking at 'seed investments' whereby they could benefit from leading on the internet in any given niche, true failure rates are likely to be high but investment would actually be much less, and as I have said Google does not have a good track record from its buy-outs of flourishing businesses. Google are No. 1, but that means everyone challenges them, and just like everything else in this universe nothing remains constant forever. Undoubtedly Google will be toppled from their No.1 spot at some time in the future, the only questions are when, how and by whom? It may not be one single entity either that topples Google, but a multitude of smaller enterprises each making small inroads into Google's position, individually such inroads may not seem severe of themselves, but when taken in conjunction with each other could cause severe and compounded damage to the Google empire.

 

[Nathan King]

Undoubtedly Google will be toppled from their No.1 spot at some time in the future, the only questions are when, how and by whom? It may not be one single entity either that topples Google, but a multitude of smaller enterprises each making small inroads into Google's position, individually such inroads may not seem severe of themselves, but when taken in conjunction with each other could cause severe and compounded damage to the Google empire.

Small enterprise taking down a behemoth like Google sounds like a pipe dream to me. And Google has the advantage in that Google is where people go to look up local businesses nowadays. This puts them in a position to expand the market, while at the same time taking customers from Groupon.

When the media hype dies down, it will be costlier for Groupon to find participating merchants. They would likely need a local presence in many areas. This is not cheap, and if Google takes away enough of the market, it could easily be unsustainable.

Edit:
There's also the possibility of Google running into anti-trust issues down the line, which could have interesting consequences.

 

[Bill Roy]

Nathan remember Ancient Rome was defeated not by some massive other empire, it was worn down and failed to innovate. This is generally the lesson of history, empires are bled to death rather than receive one mortal blow from a compeating empire. In a business sense we have all witnessed the same many times over in the last 30 years, how many High Street shops and chains have closed because of the multitude of competitors that exist on the internet, those that have innovated and reduced costs not having to have expensive properties on High Streets in numerous towns with the associated staffing and running costs for each but rather a small warehouse (perhaps just a bedroom or garage) up to a utility warehouse where the costs are but a percentage of the High Street stores.

What is more is that any empire has its own limits, staff see opportunities and leave the 'empire' to set up their own small niche competing enterprise, management cliques argue and fight for their own control of the empire, these and a multitude of other internal factors start to weaken an empire, then external competitors constantly nibble away in different areas, and each small abbrassion on the surface of the empire has to be patched up costing resources and diverting effort away from growth and innovation. All of these amount to an empire having a life-cycle, some times a re-emergence or bounce may occur, but nothing is constant.

The size of the individual challengers does not matter, it is their combined size of their pressure and the amount of combined damage and costs that they cause Google that will likely topple Google from the No. 1 spot in the end.

 

[Nathan King]

The size of the individual challengers does not matter, it is their combined size of their pressure and the amount of combined damage and costs that they cause Google that will likely topple Google from the No. 1 spot in the end.

Yes but these challengers are not going to be small enterprise like you suggested. They are going to be huge companies, such as facebook. And I don't see Google going anywhere anytime soon. More likely the case, they would be forced to share the ad market.

But back to Groupon: given the market in which Groupon operates, Google clearly has the advantage. Groupon has done little innovating from what I can tell, just marketing. Deal-a-day sites have been around for years.

 

[JB Lions]

Don't think Google gains much traction. Remember Froogle that was supposed to come in and wipe out all the price comparison sites, they pretty much gave up on that and now it just forwards to Google Product Search which is still in beta, will always be in beta. Anybody using Google Buzz? Probably not. Got a lot of hype when it came out.

Besides Groupon, don't forget about Amazon backed LivingSocial. I don't see Google competing with those two.