Perhaps you seen the recent mega-deal rumours where Google purchases Groupon.com for billions and you wondered…. why? Well, if you live in Australia and are not reading web-marketing stuff for fun this makes sense. Groupon.com has yet to open a branch here in Australia.
Groupon has a special slant on web-marketing that is locality based. They have teams of sales reps in US cities as well as other locations that work with local business to set up deals, or coupons, that offer buyers special rates for a service or item if enough people buy the deal.
Here you see a restaurant in Santa Cruz, CA offering buyers a discount for breakfast. The premise is that a set number of people must buy the deal in order for anyone to get it. So far, they have 713 buyers and more time to add more.
When you buy, you must be signed up and have a credit card on file. Groupon will not charge you unless the deal makes it’s number of specified buyers. Not enough buyers – you won’t be charged.
Deals can range from all sorts of things with all sorts or fulfillment requirements; accommodation with usage rules like mid-week stays used between 31-Jan-11 to 31-Mar-11, 3 books from a list of 20 for $30, etc. It can be pretty creative and because it is targeted a local area it can stimulate interesting results because everyone who has signed up for Groupon deals gets notified of new deals in their area. You can imagine deals going to mobile phones when a person passes within a specific radius to a service as well.
So, Google buys Groupon to get their sales team, business contacts and database of opt-in buyers. That joined together with Search and Google Places may provide a winning combination.
Groupon is not the only company doing this. Today, we also see Amazon investing $175 million into LivingSocial.com. Locally here in Australia, LivingSocial.com does have deals for major cities like Brisbane, Sydney, etc. Another servicing Australia would be Spreets.com.au.
It will be interesting to see how it all pans out. Certainly, we’ll see a lot of new buying opportunities coming to our InBox and mobile phone. Who will be the winner – hopefully the consumer as competition is good for everyone.