A couple of months ago, I received an e-mail invitation from a friend to join Groupon. For some reason I thought it was spam and didn't bother going into it. Even if it said half off for an amazing cruise. A few weeks later, I heard about how my friend's girlfriend went out to eat with a ton of friends at some nice Italian restaurant for dirt cheap because of a deal they got through Groupon.
Well, back when I had heard about it, Google offered about $6 billion to buy the booming deal-of-the-day website. According to the Chicago Tribune, Groupon is looking to quadruple Google's offer. "Going public would free more capital to pursue these kinds of strategies, putting Groupon further ahead of rivals." But Facebook could get in their way of getting that high IPO. The internet controlling social network plans to engage in the "deal of the day" market. Because Facebook knows where you live, your age, interests, etc., advertisers can reach certain target markets, making it way easier.
Although Groupon is an app on smart phones, more than 200 million users use Facebook on their mobile devices. So if Facebook can do the same thing, or better, as Groupon regarding the best deals of the day, then the competition is over. Facebook is too powerful. In my opinion, Groupon shouldn't go public unless Facebook joins the game.
Facebook is the 500 lb gorilla on the block, but they have alot of irons in the fire. One of the cool things about the web is that it offers the little guy a chance to compete. Groupon may not ever knock Facebook off, and may have to settle for just a billion or two profit each year.
ReplyDeleteFacebook does pose an excellent challenge to Groupon if they really wanted to get into that market. The fact that people log on Facebook from places such as work and school show the significant weight they hold to their clients. As posted by the author of this blog, Facebook already has all they information they need to decide what ads to target us with. The "Like" option is such an effective and powerful way to know what certain consumers want. While Groupon does have the advantage at the moment, that could probably change if Facebook decides to make major moves in that area.
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