Steadfast FinancesSix Billion Dollars for Groupon's Email List is El Ridiculoso

Six Billion Dollars for Groupon’s Email List is El Ridiculoso

Filed in Entrepreneurship , Humor 3 comments

Perhaps I’m having flashbacks to the Rupert Murdock & MySpace deal, but Google’s Six Billion Dollar bid for Groupon seems a little El Ridiculoso to me.

As Jim Wang from cleverly put it: Google is basically buying an email list because Groupon is too new for brand loyalty.

I’m all for entrepreneurship, and I sincerely congratulate Groupon’s management team for talking up their business value and long term growth potential, but 6 Biiilllllion Dollars seems a bit much for me.

However, this sort of thing is fairly motivating if you have an entrepreneurial mind: toss together a questionable internet business (in terms of sustainability in the presence of competition), piece together a really big email list, talk it up every chance you get, pay a Kardashian to tweet about it once a week, and then pitch the Google’s and Rupert’s of the world to buy your business for 10 fold more than it’s intrinsically worth at the peak of it’s popularity.

Then it’s sandy beaches and mojitos for life.

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Image Credit
Flickr by smemon87

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Posted by CJ   @   1 December 2010 3 comments
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Dec 1, 2010
1:10 pm
#1 Daniel :

What I don’t understand is why Google can’t create something similar. There are many sites like Groupon: don’t you think Google could shell out just $1 billion and come up with something that people would learn about quickly and then use their amazing targeting techniques to start profiting?

Dec 1, 2010
6:53 pm
#2 Matt SF :

Precisely! It’s like Google had a few extra billion, and paid for the convenience factor plus the client list.

Which is also why I put that little “sustainability in the presence of competition” codicil in there. If anyone with a big enough budget comes along, they could potentially be thorn in Google + Groupon’s side just by diluting current and/or future markets. I don’t think Google did anything bad by trying to grow it’s company, just think they could have negotiated a little harder price wise.

Dec 1, 2010
11:05 pm

The claim is that Groupon has $400 Mil annual revenues and it’s expanding quickly. However, this thing seems like a total joke. Seriously, there are ZERO barriers to entry, Google could whip it up in no time. This may be another eBay/Skype moment. Overpaying for something rather unnecessary. The “strategists” claim they have to keep it out of the hands of facebook. Then again, Google’s paying for all kinds of green initiatives and other goofy efforts they claim have some indirect benefit. Shareholders weren’t happy though.

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