A couple of further thoughts on Groupon and why I think it’s fucked, long term. What they do, doesn’t scale easily. To grow, they have to spend a ton of money on marketing and sales. They already use an army of salesmen and are committed to hiring more to contact and make deals with local merchants. With more than10,000 employees already they have revenues of $1.6 billion, while Facebook had 2011 revenues of $3.7 billion with 3,200 employees, and Google had 2011 revenues of $37.9 billion with 32,400 employees. As for the merchants, they are getting fucked. Say you have an offer which costs you $10 and is priced at $20. You offer it to customers for $10. Groupon takes 50% of that and you net $5. Which is a 5$ loss per sale. Say you limit to 500 Groupon’s. Congratulations, you just lost $2,500 to attract a bunch of fucktards who will only come back the next time you offer Groupon’s that will allow you to lose even more money. Is it just me that thinks this whole thing is some kind of fucking Ponzi scheme?
C'mon Groupon... Fess up!
