I’ve never much liked Groupon (read the Archive or see Fads and work back) As with everything I write about, I did use it and found it totally useless personally. Then I read all the woes that had befallen its suppliers – some of which had literally been put out of business when their promotions went wrong. Also, Groupon is so easy to replicate that it is difficult to see what their USP actually is.
Groupon was one of the many social media bubble stocks. Last night’s results resulted in a another 20% share price decline. That makes over 60% since the Nov 11 IPO and, at $4.9b, means they are now valued at less than the $6b Google offered for them before the IPO. To be fair, the results weren’t that bad. It’s just that – like Facebook – everyone expects exponential growth forever whereas we sensible mortals know that is impossible (unless you are Apple of course)
Analysts now describe Groupon as a giant Ponzi Scheme. Maybe the whole of the social media bubble is just that. The real money has already been made and extracted. It’s only the little people who are now left holding the baby and asking why did anyone ever think that Groupon was worth nearly $20 billion (as they were briefly on their first day of trading)?