Google takes a shot at Groupon

» Posted by on Aug 29, 2011 in Marketing | 0 comments

by Miriam

It seems to us that Groupon may live to regret turning down Google’s six billion dollar takeover bid.  (Now that’s rejection.  I wouldn’t marry you for six billion dollars!)  Google recently announced that they’ve moved on to a new and younger sweetheart with the acquisition (for an undisclosed sum) of the Dealmap.

As recent and very occasional users of Groupon and Living Social, we at Spalding Barker haven’t yet recommended that our clients use them to drive new business.  The benefit to the individual consumer is clear – the benefit to the company offering a deeply discounted product is not.  Check out this great infographic from PC Magazine to see what I mean.

The people who always make money are the middle men –  Groupon, Living Social, Rue La La, etc. – who offer the deals via subscription service.  By purchasing the Dealmap, we think that Google is prepared to eat the competition and make the newly formed Google Offers the main player in the field.

The Dealmap, the less than two year-old location-based aggregator of couponing sites like Groupon, Living Social, etc., announced the Google purchase on its blog.  At the same time as the company gushed (“We’re passionate about helping people save money while having great local experiences, and in Google we’ve found the perfect partner that shares this passion, as well as our vision and strategy” ) about the partnership, it  hedged about what that vision and strategy would entail, informing its partners that they would continue with business as usual “for the time being.”  (You can see the Dealmap blog post here.)

With only two million users, the Dealmap is well behind Groupon’s reportedly 50 million, but it offers an improvement on a good system – instead of opening several emails, the consumer can find all of the relevant local deals in one place.  With Google’s powerful advertising machine behind it, the Dealmap is poised for growth.  As the Dealmap increases its user base, Groupon may find that their continued success requires that they be listed on the Dealmap.

And that puts them at the mercy of their rejected suitor – Google.

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