Groupon, I need the kool aid they are drinking!

I’ll kick this off with a quick note, that I think anyone who launched a start up and built it up to the level Groupon has reached, deserves some recognition… Good job! But on a more serious note this just looks like a bubble ready to burst.

If you follow the media today and/or this week, some would like people to beleive that Groupon is worth $25 billion! I have no idea how they came to this number but it cannot be realistic in any way. Even with reported revenues, Googles offer seemed excessive. Groupon does not have anything unique, some users really and that’s all, the platform/offering is cloned daily by many others. You also have to consider what the effect will be on Groupon when Google and Facebook roll out competing platforms or if Amazon and eBay continue to improve their offering. 

If I were to guess, I’d say Groupon missed an opportunity in the rumored Google buyout, if in fact Google really did want to buy the service for $6 billion. Another issue, look at the ability of Groupon to sustain its current business model, is it feasible? Do they have anything in the pipeline to justify a $25 billion valuation, some great innovation that will wow us all?

It doesn’t take much to replicate the Groupon business model, as hundreds of companies have proven. What makes them so special that they think they are worth $25 billion? What am I missing?

Look forward to reading your thought, let me know what you think.

 

Leave a Reply

Your email address will not be published. Required fields are marked *