Strange timing for the social network giant that prides itself on discounts. With its recent announcement of public offering, the question remains; will you be getting a discounted stock price?
This seems to be contingent on whether or not the purchaser believes that the price will continue to rise when so many others are replicating the model. In this day in age, the original isn’t necessarily the most successful. We see that Groupon is getting killed by similar services such as LivingSocial.com, Local.com, and many others who are replicating the “deal finding” model.
One should always stand weary of something that grows so fast, all the while realizing that there must be a ceiling on the success of a particular service such as Groupon in an industry that is becoming saturated daily with upstarts of similar genre. While Groupon continues to rely on its catalysts, I.E. Forbes conclusion that Groupon is the fastest growing company ever, the tangible revenue numbers cannot continue to be denied.
Something that is in perpetual motion can only be stops if acted upon by an outside force and it seems as though profit might be that outside force. We question whether or not Groupon has ever made money despite its reporting in the first quarter of 2010. The new model of online based companies and social networks derives value of the company far exceeding their profits. However, how far does that model get you unless you are among the Facebooks and Twitters of the world?
Groupon continues to give explanations for their losses yet are certainly not hiding them. They claim that marketing expense, which is extraordinary for Groupon in particular, is factored in prior to reporting quarterly numbers which is essentially the .com model. They expect to raise $750 million in options upon their offering. There needs to be a point when they cut back with their advertising/marketing dollars and figure another, less costly method of attracting unique users. It seems the only logical answer to the question is the use of alternative social media platforms that are essentially considered competitors!
It has become excessively questionable as something that might be “To Good To Be True.” As a somewhat educated onlooker, I always question the future of something that continues to exceed expectations. Soon enough, expectations continue to rise and all it takes is one mistake to ruin the reputation quality. Word of mouth must continue to be Groupon’s sole catalyst all the while maintaining the rapport that it has with its current and future users and shareholders.
My personal opinion from someone who moderately plays the market is to buy quickly and sell quickly within 2-3 quarters. By no means is there is any way to predict where the company will be in a year or two years because of the unprecedented success it’s experienced. The powers that be at Groupon are obviously much smarter than me, but questionable moves, such as the rejection of a $6 billion offer from Google, raise red flags about pride and ego among executive leadership. Google’s plans are set to launch a similar model to rival Groupon, and they are certainly not a company with which ANYONE (with exception to Facebook in terms of future company acquisitions) wants to compete. For a company who thrives on discount, they certainly are spending out of their means, thus, are looking to lean on future share holders. Do you want to be that guy?
What do Lady Gaga, Justin Bieber, and President Obama have in common? Other than the fact they are ranked 1st, 2nd, and 3rd respectively for having the largest Twitter following in the world. The leader of the free world is the most recognized icon in the world but apparently not the most followed. Bieber Fever has swept the nation absorbing everything in its path like a runaway tornado surpassed only by the unusual exploits of Gaga. Obama will not take a backseat in the social media realm as he was the first presidential candidate to adopt and successfully use social media as a political forum. Moreover, with the unrest happening all throughout Muslim nations, the only information stream out of the country happens to be Twitter, Facebook, and YouTube.
A fine line is being drawn between celebrity and political figure. Our media is saturated with glorified images of our civil leaders jogging on the beach or on a family vacation thereby making it ‘political’ and therefore newsworthy. Media outlets have converged on this type of messaging not only to close a credibility gap with their viewers, but also giving them something more than issue based politics that many feel is boring and mundane. There are exceptions to this particular theory but each of which is still driven by money and ratings. For example, FOX and NBC expand based upon power and influence that they gain over time. Fox News, CSNBC, and MSNBC were created in order to present fact based news reports. Their demographic is much smaller with these networks geared to those who ACTUALLY want to stay informed with important issues and not Italian sex parties thrown by its Prime Minister. Although that particular story is certainly news worthy, it deals nothing with political mechanic or policy yet is still consider political news.
Price and value have been made distinctly different entities when determined the ‘worth’ of a web based company. For example, Twitter is at an estimated value of $10 billion while revenue exceeds slightly over $50 million in 2010. This leads people to question, “Where’s the rest of the $9.95 billion?” The answer lies in innovation. The social networking world is becoming highly saturated with innovative forums with over zealous entrepreneurs looking to capitalize on consumer intrigue. On the other hand, business owners in other industries recognize the innovation and don’t want to be left behind. Where else can a local business owner target primarily the consumers already interested in purchasing their product or service within their geographic region? Wasted advertising dollars are a thing of the past as we transition into specifically driven marketing.
Keyword search enhances the ability to be found. The more a brand name shows up in search results, the more likely the viewer will retain that particular word or image. How do we increase those numbers? Big business is being drawn not only from those who offer ‘search engine optimization’ but also those who participate. Paid placement, contextual advertising, and paid inclusion are the three aspects the comprise SEO marketing. Is it right for my business? Multi-leveled SEO marketing allows something for all levels of business. The more placements across multiple channels provide heavy resources for large companies with low to mid level businesses rely on strategic placement. No mom and pop store is going to spend tens of thousands of dollars reaching the masses when their service is provided locally.
On the other hand, social media is providing a shift in business mechanics not only for the largest of companies, but it is developing a call to action for local businesses who offer a service or product that is relevant nationwide to create an online presence. For example, as social media channels continue to expand, they continue to add more commerce friendly components to what had previously been strictly social. For example, imagine a local store providing a valuable product or service that can benefit a consumer on the east coast, west coast, or Midwest. Facebook does not currently allow for companies to conduct direct online transactions from business to consumer. They have allowed for a variety of Ads which mirror off to the company’s official website. But what if they haven’t quite established a website? How do they convert an ad into a sale without the use of a phone? The next wave of social media seems to be online transaction. Imagine social media platform that can not only establish the popularity but also provide means to a sale. This allows smaller companies to save money and establish a social media page without having yet to establish an official website.
The goal of attracting attention to a product or service is to make a sale and online transaction has become the number one method of consumer purchase but also offer connectivity to eventually lead a consumer back for multiple purchases. An isolated transaction is all well and good but however the ability for that purchase to be replicated is invaluable. The ultimate goal of those who provide web based marketing is to maximize the number of hits in a day, month, year, 10 years. The supplemental goal is to figure out how they achieve this goal in as little clicks as possible. As a business owner I leave you with this question… Do you want to be left behind or would you like to join the rest of the world and ultimately setting yourself apart by becoming an industry thought leader? Always think about the ways you can use SEO marketing and social media to create an online center of commerce.