This week was dominated by the deal that didn’t happen. While the rumored $6 billion acquisition of Groupon by Google fell through Friday night, the drama set tongues wagging this week, seemed to spur action among local e-commerce rivals and prompted a lot of thought about the future of local social shopping. So to recap, here’s a look back at This Week in Groupon.
First, why the interest in Groupon in particular and social local shopping in general?
Groupon, which offers daily deals to customers and delivers mobs of customers to local merchants who sign up, is generating between $500 million and $2 billion a year and has deployed an army of sales people to sign up local merchants. Google was looking to combine Groupon’s expertise and relationships with merchants and consumers with its ad platform and its location-based assets like Maps and Places. As Mathew pointed out, Groupon’s secret is in leveraging social communications channels to make shopping social. Groupon’s growth is ridiculous: ComScore said 6.4 million people visited Groupon.com in the U.S. in October, up 657 percent from the 849,000 people a year ago.
Here’s a look at what went down this week:
- After a report surfaced that Google bought Groupon for $2.5 billion, new reports came in this week that Google was offering $5.3 billion with a $700 million earn-out clause. The deal dominated headlines, but ultimately died Friday after Groupon reportedly turned down Google and chose to go it alone, possibly with an IPO in the works.
- Hitwise gave the proposed deal some oomph earlier in the week when it reported Groupon was getting 79 percent of U.S. group-buying visits, well ahead of second-place rival Living Social with 8 percent of visits.
- Amazon invested $175 million in Living Social, which said it expects to book well over $500 million in revenue next year.
- Meanwhile, Tippr, a white-label group buying service, announced a patent licensing program for companies, a warning to competitors who may be infringing on Tippr’s patent portfolio.
- Groupon also picked up local marketing services company Ludic Labs, which develops marketing services Offer Foundry and Diddit, and also scooped up three Asian deal websites: uBuyiBuy, Beeconomic and Atlaspost. The company also expanded its daily deals model to include multiple offers a day.
- Ebay, meanwhile, bought Milo.com, a startup that catalogs items and lets users find them on local store shelves.
Even without the “Grouple” deal, this week highlighted just how much momentum is behind local e-commerce. As Mathew points out in a GigaOM Pro Report, (subscription required) social shopping is a real phenomenon. And as David Card shared in another GigaOM Pro Report (subscription required) about 90 percent of all local ad spending still happens through traditional media. That means there’s a lot of potential in connecting shoppers with local merchants. Google may have missed out on Groupon, which would be its biggest acquisition by far, but it had a good eye toward the future on this one.
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