Groupon has exploded over the past year resulting in a reported $6 billion Google acquisition bid a few weeks ago and rumors of an imminent IPO. But I don’t get it.
To me, it just seems like these guys are just delivering a new kind of coupon that wasn’t possible before crowd-sourcing was contemplated. In other words, they are first to market. I’m not saying this is an insignificant accomplishment by any means. But I really do believe that it won’t be tough for new entrants (more local, more segmented networks) to compete in a few months. These new entrants will quickly eat into Groupon’s margins and reach.
I think that all the hype for Groupon is based on revenue growth and margins. I must admit that this is refreshing to see because so many of these internet startups are valued so expensively before they make any real money. But I just don’t see their hockey stick growth curve continuing too much longer. Unlike Facebook, for instance, they haven’t built anything that can’t easily be replicated.
And it’s my gut feeling, there’s nothing special about Groupon in the long term.