Local-business giant Groupon has seen meteoric growth. Google has made a deal for Groupon. The offer values the company at over $ 5 billion. If the deal passes through, Google would be increasing its local-search dominance, but expand its small and medium enterprise industry.
Groupon’s community enterprise
The Chicago community enterprise marketer Groupon was started two years back. It has grown quite a bit in just the last couple of years. The business has 2,500 staffers across the globe and pulls in half a billion dollars in revenue each year. The business model is simple — the business presents one discounted package each day, e-mailed to subscribers. Groupon is a fantastic way for small and medium local enterprise to get well known. This is how customers get brought in. The goal of Groupon is to get deals to customers that they are more likely to buy. Tracking buying habits and demographics is part of the way to do this.
Google's problem with local search
Small and medium community businesses are hard to get to by Google even though it is a leader in web search. There is expected to be a drop in paid local search on Google. Within the next 5 years it will drop about 20 percent. Small companies tend to use and then drop Google advertising and sponsored search outcomes. Community companies only make up 18 percent of Google's ad revenue. Facebook is also challenging Google’s dominance by targeting local companies using the launch of Facebook Places. Anti-trust investigations in Europe are hitting Google due to the rankings of search engine results. The business, if found at fault, might lose a lot of revenue.
How the Groupon / Google package will work
Groupon might do well to accept Google's $5.3 billion offer. The package would be great for both companies. Groupon, a relative infant in the tech world, would get a huge return on its first investment. Google might be given access to a huge trove of consumer data – everything from consumer e-mails to pricing info and spending habits. Google would likely use the chance to continue its expansion beyond simple search and paid search revenue. There is no surprise within the package taking place. Google, in 2009, wanted to buy Yelp. There is a difference though with the Google-Groupon deal. Local buying opportunities would be changed for many consumers.
Information from
All Things Digital
kara.allthingsd.com/20101129/googles-groupon-offer-5-3-billion-with-700-million-earnout/
Adage
adage.com/digital/article?article_id=147349
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