I am struggling to believe in Groupon, which Google is reported to be considering buying for $5.3bn, making it the company’s largest acquisition. Despite Groupon having some social media trappings, and being profitable, it feels oddly old-fashioned.
Groupon amasses groups of users to take part in mass one-off discounting programmes by retailers – hence the name. In the US, where coupon-clipping is still popular, despite the power of Wal-Mart’s “every day low prices”, it grown very rapidly.
Google seems to be interested in Groupon to boost its local advertising and e-commerce business, the reason it almost bought Yelp a year ago.
But while Yelp clearly fitted with Google’s mission to organise the world’s information, Groupon feels more like a way for bricks-and-mortar retailers to compete with the Amazons of the world.
As with mail-order retailers, a lot of Groupon’s value lies in its list of customers – not only where they live and demographic data but evidence about what they will buy. That could provide a boost for Google’s e-commerce operations, which lag Amazon.
Mathew Ingram of GigaOm argues that Groupon would be a way for Google to strengthen its presence in “social advertising” – allowing companies to communicate directly with likely customers. In this sense, it is similar to Google’s flagship paid search business.
Still, buying an electronic coupon company? Is this the way to revolutionise the world?
