Why GroupOn Matters to Google and GroogleOn Matters to You
November 29, 2010
Disclaimer: the ideas presented below are speculation and entirely my own. These thoughts do not necessarily reflect the views of my employer.
The internet is all abuzz about Google's rumored aquisition of GroupOn. Here's why I think it's a great idea, regardless of whether or not this rumor turns out to be true.
Google's strongest revenue generating businesses are built on three principles:
- Self service bidding (enabling advertisers large and small - the long-tail adds up)
- A fantastic user value (search results)
- The contextual insertion of advertiser messaging into user areas (search and display on and off Google)
Why this would work for Google
Maps is probably Google's most ubiquitous mobile/location offering. While Google has integrated offers into their Maps/Places platform, GroupOn is subscription based and is sitting on a massive pile of email subscribers. Just think of the reach play.
But I don't think this would be exclusively about cross-pollination of their messaging, extending their respective reach. This is going to be about a new mashup of their platforms at their core, enabling an entirely new world of location-sensitive socially-integrated incentives driving commerce. This new hybrid solution could theoretically operate on a Cost Per Acquisition (CPA) model, attracting premium rates.
This would coincide nicely with the rumored launch of GroupOn's self-service platform. When we combine the social mechanics, brand reputation, momentum and subscriber based of GroupOn with the ubiquity of Google Maps and Android, we arrive at a strong offering to users, advertisers and Google (revenue), all built on a self-serviceable platform. (I say self-serviceable as I'm not sure GroupOn will entirely abandon their core of single featured offers with the launch of a self-service model, rather I see these as complimentary offerings sitting side by side.) Whether it's a merger or an integration agreement, a GroupOn/Google Maps mashup would be a powerful entity.
Why this would work for GroupOn
With a growing field of competitors hitting GroupOn's scene, now would be the perfect time to make use of Google's scalability expertise in both technology and sales. Additionally, nobody has driven self service bidding quite like Google.
Why this would work for users
As early adopters, we enjoy the serendipity, group behavior and discounts of GroupOn. The mainstream by and large knows and trusts Google. A larger user base and solid extended platform will help us get what we want, only better.