Groupon say no thanks to Google

I'd heard of Groupon but hadn't really paid it too much attention until the recent headlines about the offfer from Google.  $6 Billion to be precise, for a company that is exactly two years old.  Wow.  But Groupon have said 'no' according to PC World; they don't need Google's money, and their prospects are just fine without them.

Groupon offer special deals to consumers, based on a minimum number of people signing up.  And having had a look at the UK site, they do seem to be genuinely good deals, a lot of them around eating out and activities (learning to ride, paintball etc).  For instance, the Montcalm hotel has sold 3789 'teas for two' at £13 instead of £39.90!

(As an aside, I do wonder how the hotel is going to accommodate all 7578 people between now and the end of March - that's 70 per day!  And they can't make much money at £6.50 a head, although a few sandwiches and cakes don't cost that much.  I wonder also whether the sellers find that many of the 'sales' (paid for up front) are never redeemed; so how many of the 3789 will get round to actually coming for tea? that may make it economically more attractive than it first looks for vendors.)

Anyway, that's not the point.  The point is the huge valuation of B2C networks like this.  Far higher  than B2B networks, but perhaps that is a clue as to why firms such as Ariba are focusing on that network aspect of their business rather than sourcing or services. The potential - and potential valuation - if someone can become the standard B2B trading platform is huge.

It also begs the question of whether the Groupon business model - or something like it - would work as a B2B platform?  Why shouldn't a supplier offer 100 laptops, or 10 days of consulting, subject to a minimum take up, instead of tea for two at the Montcalm? Is this a great business idea, is someone already doing it, or am I mad..?

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