Yipit has an interesting perspective on Groupon and why it may be selling to Google: it’s nervous about competition from established online brands and traditional media companies.
Here’s a couple of excerpts from the Yipit post:
[T] brands of these [online] media companies, while not having deal authority, do have product and service authority. They’ve been telling their audience how to spend their money for years. For example, you are much more likely to trust a golf magazine’s recommendation of a specific golf course outing than Groupon’s recommendation. Plus a golf course would rather be recommended by a golf magazine than Groupon.
These large, old media companies with millions of users and strong brands will create real competition for Groupon.
With a bunch of successful, large daily deal services, a service like Yipit (tiny disclosure: I co-founded Yipit) that gives users one place to browse, purchase and manage all of these deals from all of these sources is inevitable. As more of these larger services launch, users will realize there are a so many of them and will seek one place that’s a one-stop-shop. If that happens, Groupon will suffer from just being one of many deals a user is browsing.
I think the post is incorrect about the motivation of Groupon but it does lay out the risks going forward to some degree and correctly implies that consumers are fickle and there are lots of established brands in the segment.
Groupon is a monster and Google ownership would put it at the center of the universe; however there’s are many risks and uncertainties in future execution that go beyond the fact of lots of competition.
What do you think of the Yipit thesis?