The Groupon IPO filing has resulted in terrific analysis and commentary on the web, mostly negative. Here are the most interesting articles I’ve come across:
Key excerpt #1: “Why is Groupon not merely a tech-bubble datum but a Ponzi scheme? Simple: Groupon has found that you can get local merchants to try anything once if it brings them new customers.”
Key excerpt #2: “Perhaps Groupon management thinks it is creating a sustainable Prisoner’s Dilemma, one that ultimately destroys value for the local merchant ecosystem but benefits Groupon.”
Key excerpt: “The essence of that critique is that Amazon is just buying customers, and that once it runs out of the money to do so the Ponzi scheme will collapse. Of course, Amazon is buying customers, just as all companies do.”
Key excerpt: “The deals have been embarrassingly good. I used the first Google Offers deal at Floyd’s Coffee yesterday. For $3, I got $10 worth of food. Let me tell you, it’s really hard to spend $10 in a coffee shop. I got an order of red beans and rice, a Mexican Coke, a doughnut and a chocolate chip cookie. The total came to $9.95.
That’s a great deal for me, but it’s unsustainable for the business.”
Key excerpt: “Which makes me think that Groupon is just advertising, and fairly expensive advertising.”
Nothing “key” here – all five bullet points are concise and important.
“Deeper analysis of the Boston case study, however, shows that despite impressive topline growth Groupon’s business model peaked around Q3 2010 and has been deteriorating ever since.”