• dstiehr

    Groupon has one good run in it – enough to net a nice IPO – and then it will plummet. There’s too much manpower involved in the Groupon sales process for it to scale effectively (as reflected by the comment above about increasing customer acquisition costs), and small businesses aren’t making enough money off of their promotions to go back a second or third time (as reflected by the comment about deteriorating business in mature markets). So they will be able to take small businesses’ money once, in some cases twice, and have impressive revenue totals that will inflate the IPO, but long term it has no chance.

    Google won’t need to tie up so much money in paid search because they can integrate it into so many other products like Places, and I’d bet they’ll figure out a way to better automate new customer sign-up so as to make it more cost effective. They have a much better chance of succeeding in the space.