Groupon & the Local Social Commerce Frenzy


This week was dominated by the deal that didn’t happen. While the rumored $6 billion acquisition of Groupon by Google (s goog) 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 (s scor) said 6.4 million people visited 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:

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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