Archive | June 2011

More thoughts on Groupon, local

Local

I’ve written a few posts and commented on a few others about Groupon and their pending IPO. To be clear, I believe they have to, and will, continue to add to their service offerings and therefor flourish. If they don’t, they won’t. My opinion.

I think they need to provide more value to the retailer and there are many ways to do that. There are many, many companies calling on these retailers trying to sell them everything from advertising, search, websites, mobile, banners, yellow pages, daily deals, etc. At some point this needs to get centralized or retailers will feel like they are being assaulted (they probably already do) by legions of well-intentioned sales reps.

Groupon, with their sales force, could move to consolidate these services under one roof. Someone will (ReachLocal, AT&T (YP), large media company, Yahoo, AOL, Google, Micorsoft, other?). Right now it is like the wild, wild west when it comes to local. Too many players, too many service offerings and thus too confusing for the merchant who is just trying to make sense of it all.

The local space needs a leader and thus far none has emerged. Groupon is a candidate for that spot as are a handful of others.

Who’s going to figure it out first and capture this enormous market?

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Smartphones Preferred Over Computers for Web Access

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More than one-half of smartphone owners (55.9%) say they prefer using a smartphone to a computer when accessing the Internet, according to a new survey from Prosper Mobile Insights. Moreover, some 52.9% of smartphone owners say they use all of the functions of their smartphone, so much so that “it’s their life.”

Asked which device function they can’t live without, most smartphone owners cite texting (21.6%), accessing the Internet (16.7%), or sending/receiving email (15.7%). Fewer users can’t live without calling features (7.8%), GPS (6.9%), access to Facebook (5.9%), or apps (4.9%).

But they also raised privacy issues citing the following as their biggest concerns:

Location being tracked: 35.3%
Someone accessing personal information: 31.4%
Someone accessing financial data: 21.6%
Online behavior being tracked: 11.8%

Good news for retailers: 81.4% of smartphone users say they use their smartphone to browse for products and services, and more than three-quarters (77.5%) use their smartphone to find information on retail stores.
Among other shopping-related activities conducted via mobile, smartphone owners cite the following as their favorite:

Reading customer reviews: 57.8%
Researching specific products: 57.8%
Receiving text messages with special offers: 53.9%
Making purchases: 50.0%
Scanning QR codes: 34.3%
Writing customer reviews: 20.6%

Click the link above to read the press release.

Got a Bad Review? Explain Yourself

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We have now added a cool new feature to our Reviews/Comments tab on our mobile websites. Now a business owner who is subjected to a particularly nasty or untrue comment can respond using the new “Explain” feature.

At least now you can get your side of the story in. Then it’s up to the customer.

Groupon Update – Like I said, I’m not alone

Couple of people not too high on Groupon IPO:

Peter Cohen of Forbes Magazine says “Stop this IPO 

David Heinemeier Hansson of 37 Signals says “Pass on this deal

Does Groupon’s Business Model Stand Test of Time?

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Mashable ran a story (link above) about Groupon’s forthcoming IPO and listed a bunch of impressive growth stats. But the ones that stood out to me were:

– Groupon has raised $1.12 billion so far in venture funding from a $6.8 million Series A, a $30 million Series B, a $135 million Series C and a $950 Series D.
– Groupon had $208.7 million in cash and cash equivalents on March 31, 2011.
– Groupon has paid $34.8 million for its acquisitions, not including CityDeal and QPod.

They raised that $950 million Series D in mid-January and they’re down to $200+ million two months later? I can see why this IPO was fast-tracked.

We, like many others, have had questions about their model due to anecdotal rumblings we’ve heard from the Merchant community that this was not a repeatable event for them – aka they were not overjoyed with the first experience.

Now they are partnering with others like Foursquare to evelove their services and that seems like a good move. I think they recognize that the model that got them this far (pretty darn far!) isn’t sustainable on its own in the long term. Good news for them, since they have reached this level of mass there will be no shortage of companies lining up to partner with them.