Groupon is threatening to break the I(nitial)P(ublic)O(ffering) record held by Google of $24.6 billion in 2006. The company offers "Group coupons' each day for special deals in agreement with various retailers. For example, you can buy (6/4/2011) Three Spray Tans at Copper Zone Tanning - Beaver Falls ($50 Value) for $15. That's a whopping 70% savings for getting your body sprayed with tan 3 times. The 'catch' is that these deals last only a short period of time, often 24 hours, and are only "on" when a specified number of people buy into the deal. Don't worry, the tanning spray needed 10 people to buy in; thus far it has 80.
Let's use a little group activity ourselves for Groupon. I'm going to list a couple of my thoughts about Groupon, but I'm also interested in learning what others have to say about it. Have you used it? Would you use it? What do you think of the idea? What do you think of the IPO?
Here are a couple of my thoughts:
On the one hand I think it is an amazing idea of combining consumerism, democracy and marketing with modern web technology. It gives new meaning to "voting with your dollars." I'd love Groupon to make a deal with the U.S. Government whereby if 100 million people buy in at a special discount price, they would supply universal health care.
On the other hand I think it may be our last step off the cliff of consumerism. Like the secondary market of subprime mortgage securities this adds nothing of value to the marketplace other than new packaging.
By the way, Groupon may become the fastest company to reach a billion dollars in sales. However, last year it lost a staggering $413 million on revenue of $713 million. That prompted Groupon to establish their own accounting standards for persuading potential IP0 investors. Some of you may also be interested to learn that the idea for Groupon was created by now-CEO and Pittsburgh native Andrew Mason.
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