Google to Groupon: If You Can’t Buy ’em, Beat ’em
When Google’s $6 billion dollar purchase offer was rejected by the online coupon leader, Groupon, Google decided to launch its own version of the daily discount deals.
Groupon may have began as a small start-up with limited resources but it quickly grew into a dominate force with very little serious business competition. Can the online search engine and technology giant, Google, beat them at their own game? Can Google be the first real competitor of Groupon?
What is Groupon?
Groupon started as one person’s idea to expand the basic idea about coupon savings and take it to the next level. The key was taking those offerings to the internet for a broad audience reach and the timing could not be better since many consumers were feeling the sting of the recession. Groupon negotiates significant discounts from local businesses on various products and services and makes those daily offerings electronically to their list of subscribers. Groupon’s income comes from splitting the purchase amount with the local business.
The group-discount coupon called a groupon is only available for purchase for a relatively short time and may have purchase limits which encourages immediate purchase. The consumer gets substantial savings and the business gets some good advertising and more customers.
Google vs Groupon
This seems like such a good formula that a ton of daily-deal companies are jumping onto the crowded bandwagon. There are over 500 coupon-deal sites and new ones forming. Groupon has already purchased some of its smaller yet strategic competitors in international markets to rebrand under its name which has produced international visibility. So far, only LivingSocial is seen as a serious competitor mostly due to a sizeable investment by Amazon of approximately $175 million dollars.
Can Google overtake Groupon and the rest?
If Groupon can take $1 million dollars in seed money and turn it into a rumored $25 billion dollar IPO in three years from its initial launch, what can Google do with its financial resources and established internet reach? Is it enough to try to duplicate Groupon’s success? What can Google do to excel and exceed Groupon? How will Groupon respond to the new Google Offers to ensure that it remains at the top of the industry food chain?
First is not always best
It is not necessary to be the first as long as you can learn and improve upon the competitor who got there first. This should be a good competition for some future lessons learned on business architecture and strategic do’s and don’ts.
You are absolutely right that you do not have to be first. Groupon took a simple coupon idea to the big league level but there is always room for improvement. Maybe Google will offer coupons at 90% discount? I think Google’s strategy is to take over the world.
@Sean M.
Yes, Groupon is delving into many different areas where there is already a clear leader. There are benefits to letting someone else makes the mistakes first as long as you can learn and improve from them. Hopefully Google makes the business decisions to make those improvements in the customer’s best interest.
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@ Marden
Thanks!