Friday, June 3, 2011

Groupon Goes Public

From restaurants to pedicures to white-water adventures

Do you use Internet coupon services like Groupon and Living Social?  If you don’t, somebody you know probably does.  These services together have well over 50 million users in several hundred cities around the world.  They provide a very simple service – daily local coupons on the web or sent in email. 

The idea is that they achieve demand aggregation by getting the same coupon to a large number of people, driving substantial commerce to a particular business.  That business is happy to give a large discount to drive sales and build a customer base.

It’s a pretty simple idea that could be replicated fairly easily by newer businesses.  But Groupon got enough of a head start to become the big dog.  Yahoo offered $3M to acquire Groupon.  Google later offered $6M.  Groupon spurned them both.  Yesterday, Groupon announced plans for an IPO, which could help it to raise big money while staying independent.  This on the heels of a very successful IPO for the business social network, LinkedIn.

Google and Facebook both are hurrying to get in the game. Facebook Deals and Google Offers could leverage large user communities to get them a big share of this emerging space.  Groupon, though, has a big head start and what seems to be a faithful audience.

Does the Internet coupon idea seem like an idea whose time has come, or is it a fad?  Should the services work differently, such as more diversity in coupons, or perhaps discounts applied automatically when you pay directly from your smartphone?

Please share what you think about the online coupon space by adding your comments here.


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