Blog Post

paidContent 50: The world’s most successful digital media companies

24. Groupon

Advertising, United States (Public)

Last year’s rank: #23

Digital Content Revenue

$1,610,430,000 (100% of total)

Digital Snapshot

Daily online deals could easily have been an idea that local newspaper publishers pioneered, as they — once upon a time — owned local classified markets. Instead, Groupon and its pure-play ilk beat them to it, spawning several copycats, including from publishers. Groupon sales more than quadrupled in 2011, when it said it sold to more than 33 million customers for 250,000 merchants around the world. In difficult economic times, small businesses appear to have flocked toward cheaper, more guaranteed advertising methods.

Key Move

The credibility problem. Groupon went public to raise $700 million in November, valuing it at an eye-popping $13 billion. It spent the cash on overseas acquisitions to build international heft, but tweaked its revenue reports twice along the way and revised later results after disclosing a “material weakness” in its own financial controls. Turns out, it had incorrectly accounted for customer refunds, which made revenue look higher and losses lower than they actually were. The Office of Fair Trading launched an investigation after more than 50 advertising complaints were filed against Groupon in less than a year. It warned Groupon to correct widespread abuses of consumer protection law.

Our Methodology

We considered whether or not to include GroupOn, since the paidContent 50 does not aim to consider out-and-out e-commerce companies. But we decided to regard GroupOn as a new-line advertising company. It has managed to take its payment not from advertisers of products and services but, instead, a fee from every successful consumer transaction. GroupOn’s 2011 financial figures disclosed a single revenue category, which we include here.

Source: Shareholder letter

— RA

21 Responses to “paidContent 50: The world’s most successful digital media companies”

  1. Good Job Mr. Robert

    I am a freelancing SEO and SMM professional. The recent update of google penguin and panda has changed the SEO pattern radically.

    And google has done this algorithm change to spread their digital ads business nothing than this.

    I really hate this because, making loss to others for their own profit is a Digital Crime and Weak Business policy from my view. Check my site Arsenal Highlights

  2. ciaranj

    If you want to rank things on revenue, fine. But then don’t call it the ‘Most Succesful List’: Microsoft might ‘make’ $3.9b on digital content, but it also loses around $3b every year too.

  3. Abdallah Al-Hakim

    I think this is a terrific list despite any reservations some people have about the methodology. It really demonstrates the huge growth potential of digital media companies in some of the emerging markets. Also, as a scientist – I note Elsevier being top 5 in revenue (Elsevier is publisher behind many of the top scientific journals).

  4. Mindbendingpuzzles

    What about Valve and their digital games platform: Steam. I know they are a private company and figures are hard to come by but in 2011 Forbes reckoned they have more than 50% of the 4 billion dollar PC games download market. That is huge.

    I would really love to see Paid Content do some investigation on Valve because they are an incredibly innovative company who really push digital retailing to its limits.

  5. Groupon and Monster are’t really media companies. I’m not even sure that ad agencies should qualify in the same category as Viacom or Time Warner. Totally different business model.

  6. Brendan

    Why is eBay not in this list? They have an ad business on eBay.com and their classified sites, and the seller fees they collect are essentially paid ads since the platform doesn’t handle the items. This list is also missing Alibaba Group from China (including Taobao), and Gree from Japan.

  7. Zato Gibson

    “Creating this list wasn’t easy.”

    I can imagine. Manipulating the numbers to get Microsoft into the top 10 must have been really tough.