- What goes on in the minds of Groupon management these days? Remember they turned down $6B dollar offer from Google in December, 2010. I thought it was a dumb decision by Groupon to turn down that offer from a giant internet company. They could've done much better with the muscle power of Google and built a strong barriers to entry for competition. It seems competition is mounting pressure everyday and the eventual successful IPO might be in jeopardy.
- Today every company that has a website with reasonable traffic seems to have a desire to tap in to this "Local Deals" market and consumers are tired of it.
- Local businesses are already feeling the negative effect of advertising with Groupon.
- Google plays a bigger part in it. Google shows recent Groupon deals in its local search page.
- Imagine the reaction of your regular customer when they learn the discounted price somebody paid for the expensive dinner they just had.
- Think about another issue, when a coupon expires Groupon shows your competitors deals "similar" offer. How would you feel about that?
- What was Groupon's strength again? Network effect? ( they had most number of local businesses posting deals with them?). How difficult it is for competition to reach out to these local businesses?
- At&T has announced that it is going to launch Groupon Competitor. It makes sense, it already has a relationship with local businesses through its Yellow Page Service.
- Expect announcement shortly from other Yellow Page companies. There are no barriers to entry in to this market for the entrenched players. So why wait?
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