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Why Groupon is Worth $25 Billion
Admittedly, Groupon is a work in progress. They continue to spend insane amounts of money to acquire customers and merchants to try to extend their dual-sided network effect with consumers and merchants. Many people see this as unsustainable, some adamant it’s all just a Ponzi scheme.
But these naysayers who are fixated on the current “daily deal” economics as long-term unsustainable are completely missing the point. The real innovation Groupon brought to the table wasn’t in advertising deals per se, it was their ability to profit off of closing the attribution loop in online-to-offline commerce. And this is a huge land grab that others had completely missed.
Google never had success (monetarily) with online to offline search, because you can’t go to a search box and carry that discovery process to your offline environment. Yes, you can absolutely use a search query to find a place to go, but when you get there no one knows that you found it on Google.
