Groupon: How Internet Changes Everything, Again

Groupon has grown really fast in their first year of existence; like no other company, they have rolled out a business model that is disruptive for traditional businesses with a simple and clear proposal for offline merchants. And they have done it creating a strong and easy to use internet platform: customers are working for them, creating the content they need to become someone on the net. And just to be amazing, they have used social media platforms, like Facebook and Twitter to amplify their value proposition to the market. An offline merchant who was able to receive 300 people a day in their store can reach 25,000 with Groupon. Just saying...

At the heart of Groupon's proposal is to bring one of the major assets of the internet to offline stores: a win - win situation. Offline merchants can invest in marketing paying now per performance. Merchants only pay when people visit their physical stores, so they are able to measure all the critical numbers of every campaign they do and control their marketing budgets like a cost of sales.

This simple and clear approach to a traditional business sector, mixed with their success, was the reason that Google offered six billion dollars for Groupon some months ago. Google wants to dominate the future of advertising. Local advertising is one of the most important areas they are working to expand and improve. Adwords permits some local extensions, but it is far from the simplicity and accuracy of Groupon's advertising platform.

The question is: What has Groupon seen on the horizon that makes they say NO to the Google offer? Maybe it is the option to raise 950 million dollars from investors (and cash out some 350 million) and ensure a fast and strong future for the company. But the truth is that the worldwide advertising market for local business creates a huge opportunity to become one of the biggest internet players ever. A company that has grown at such a fast pace in their first year of existence wouldn't want to give that up. If I were Groupon's CEO, I would like to know where the limit for my company is. If there is one...

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