Groupon provides a service where people can purchase coupons for a wide variety of goods and services at a discount. People go there to find deals for businesses of all sorts.
I think Goupon’s business model is brilliant. They negotiate huge deals which are usually discounted between 50-90%. The site has a timer counting down the time left to buy the coupons which uses the law of scarcity to entice people to buy. The only flaw I see is that it is easy for others to copycat the idea.
Now, Google has started a competitor for Groupon called Google Offers. Goupon’s competition is growing, and it is becoming a huge problem for the company. The service they provide is great for consumers, but the company faces challenges of losing market share with major competitors like Google Offers and Living Social.
After Mark Zuckerberg’s success with Facebook, many internet companies have been turning down offers to be bought out in hopes that the outcome will turn out to be like Facebook’s. Google Offers is going to hurt Groupon badly, because unlike Groupon, Google is a solid company with a lot more money to invest.
Groupon turned down several billion dollar offers… Was it a good decision? Probably not.