Google Buys Groupon: 3 Lessons We Can Learn

It’s the hottest news of the season. $6 billion dollars for a company that isn’t quite three years old, and wait for it…has no actual product? Well, it did make $500 million in revenue with its 3,000 employees last year, and Google is betting on it! The business is no other than Groupon.com. While many copycats have come to the market, this daily deal giant has been the leader in the field.

So, what can we learn from Google’s decision to vie for Groupon’s attention?

1) Connecting people is a powerful business. As media and technology split our attention in a million directions, gathering multiple people at one water hole continues to be a challenge. And, for those like GroupOn who can conquer that challenge, it means money. Advertisers would kill for the 1950s again when TV and billboards did the trick. Want 80 percent of the market share? Spend money on ads. Today, “eyeballs” are much harder to find. Groupon has been successful because, much like Facebook, it is attracts people to one destination.

2) Local businesses are desperate for a way to reach audiences, especially online. Google has long been trying to crack the local business angle code. How do small mom-and-pop shops market effectively online? A couple of years ago, if I asked some of them to give me 50 percent of their sale as a commission, many would have showed me the door. Today, with a flailing economy, and businesses struggling to keep doors open, the same offer from GroupOn sounds like music to their ears.

3) There is power in playing the middle man. Remember, when the middle man was scoffed at? Someone who took a piece of the pie without doing much of the work? Well, in the age of overwhelming information, we welcome the middle man. Like, Google. What does Google truly do? It takes information and presents to us what it feels like is most important. Much like an information broker. What does GroupOn truly do? They broker daily deals. Big cities + time strapped citizens + lots of businesses = GroupOn’s jackpot.

Google buying GroupOn is a sign of the times to come. A time where he (or she!) who can connect people to what they need in an easy way, wins. The time of the power broker has arrived!

Photo Credit: http://www.flickr.com/photos/smemon/
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  • Syed Ahmed

    Good write-up!
    Though I don’t entirely agree with whats written. I suppose it early days to say, its a good deal for Google.

  • http://www.sarafachetti.blogspot.com Sara

    Shama, I would love to see blogs written about:
    1) How a freelancer can make full-serviced digital marketing campaign work for them, including using methods that may seem untraditional for a freelancer, such as facebook advertising and the like.

    2) The important specific questions a business or personal brand should consider before launching a blog – to name a few:

    A) Will you have time to update the blog at least once a day/every couple of days?
    B) Will you be able to maintain other social media accounts to compliment your blog?
    C) will you have time to engage your readers by responding to comments, etc.?

    These are just a few I’ve considered – what are some others I may be missing that you consider to be most important?

    Thanks for considering these topics!

    • Shama

      Sara –

      Thank you very much for the suggestions! I’ll certainly address them in the future.

  • Adam

    Do you not feel Google purchase is a weak version of what facebook is rolling out on relation to it’s incentive side to ‘places’ (and foursquare for that matter) both of which can have groupon type add-ons really easily if mass push messaging were really that valuable in medium/long term?

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  • Beth

    It’s nice to read a good blog post. I enjoy many of the articles on your web site.