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Jeff is great ... I wouldn't call Jeff and and Amazon ... an innovate an Innovative type innovator type company ... they have never been on the Leading Edge of of much ... they're a follower they're a good execution company ... even when they buy comp ... they're not one of these companies that go crazy buying outlandishly ... their Acquisitions are all you know low eah multiples ... an intelligently run business
I think the biggest threat to you know Groupon and living social being proprietary brands that have to spend all their own money to build their own brand are Publishers like those guys ... I think they're all uh threats to group on but I think they're all incredibly good opportunities for consumers
if you say like of all time it's obviously uh Bill Gates
I think we've got a long way to go before the now and the mobile uh deals uh we have enough inventory and enough valuable stuff there to to sell a meaningful amount of uh vouchers there right now the mobile instant deals are not meaningful in anybody's p&l
I do think that are people who are enamored with the business and you did say the top cost is the acquis customer acquisition so Groupon plus somebody with zero customer acquisition cost Allah Google Allah Facebook I think becomes a potent
I think the biggest threat to you know Groupon and living social being proprietary brands that have to spend all their own money to build their own brand are Publishers like those guys I I I'm partners with all those people that you mentioned I'm providing them in different cases technology and or deals uh and they already have scale of audience uh I think they're all uh threats to group on but I think they're all incredibly good opportunities for consumers because now like if you look at what F
deal aggregators are providing a a valuable service in the deal uh landscape and you know to deal with um fatigue or you know user interface or selection there are over 500 deal uh sites in the United States and in some cities there's 20 or 30 of them and nobody wants to get 20 or 30 emails uh Yip it does something good which is lets you go in there and say I'm interested in restaurant deals or spa deals or these kind of and create a little filter and then they only send you deals that you're in
an insolvent Groupon would not be good for the overall business uh the category right but you know like I said before if very small tweaks to Groupon's business turns Groupon insolvent for example if they had to pay their merchants in four days instead of 90 days they would be insolvent the second thing is if you know you look at their 80 million subscribers only 15 million of them have purchased so they've spent a lot of money on customer acquisition for customers that are never ever going to b
the New York Times would never do this the Wall Street Journal will never do that they'll never blend and say David POG gloves this gadget we are going to sell it at a discount or Walt Mossberg I mean I don't think they would even quote
as a media company you can e integrate a deal thing well like yler has or poorly like the New York Times has
the New York Times even has I guess a times limited product now um that doesn't look very good and it's sort of buried on their site
I can't say the same about Groupon I don't think you can say the same about you know a lot of the big names on the tech startup scene
those results are not meaningful in the overall business if you look in their p&l you can't find a group on now line that's because they're not selling any of those yeah
I would be astounded
I think Groupon may be uh somewhat uh susceptible to that right now is that their corporate strategy is being driven by the needs of their investors for liquidity versus the needs of the business
I don't think if you're the CEO in that case you have the ability to convince your investors to not sell at the IPO
I don't think they're a technology company their primary asset is a talking cat okay it's they're not a technology company they're a brand company
they don't even have 18 months on their balance sheet right right it's kind of challenging I would agree it's challenging
the founders of the company have taken $340 million already off the table and of the $750 million potential IPO proceeds that they have something like 400 million of it is
the numbers that they have to acquire to continue to fill the churn is is incredibly High
you look at their 80 million subscribers only 15 million of them have purchased so they've spent a lot of money on customer acquisition for customers that are never ever going to buy from them
if very small tweaks to Groupon's business turns Groupon insolvent for example if they had to pay their merchants in four days instead of 90 days they would be insolvent
do you think that they will be able to uh remove that massive customer acquisition cost as they become you know a very well-known Global brand no okay
I think the biggest threat to you know Groupon and living social being proprietary brands that have to spend all their own money to build their own brand are Publishers like those guys
the reason you're seeing a 50% off retail thing is not not any expectation of daily deals or anything particular to what we're doing it really has to do with consumer Behavior what you're trying to do is spur an impulse purchase and if you see 20% off you're not going to take that impulse purchase really a deal needs to be 50% off to get a person to click or to buy
Groupon's doing some things that I think are unsustainable
Groupon doesn't have that because in fact Groupon doesn't want the consumer going back to the merchant they want the consumer going back to Groupon
if you took the float of out of Groupon's cash flow they would be out of business
what will not be sustainable is Groupon's tax on the business of 50% of that I think that margin will go down
Groupon's got 80 million subscribers
it's going to be very hard for Groupon to do something which these local Publishers can do very easily
Groupon has certainly tried to educate their entire uh populace that all you should care about is price
if you looked at Groupons numbers in their IPO they're losing money because they have to spend a lot of money on new customer acquisition and reducing uh churn and they have a giant fixed cost Salesforce
I don't believe that someone will catch up in terms of building another consumer brand
group buying and Groupon in particular is the biggest threat to local media companies because it dis intermediates not only the audience but also the advertiser from that Media company
when I saw what Groupon was doing I said that really solves the problem which it provides consumers offers which that they want you know advertisements which they you know volunteer to get plus it gets people in the door on a variable cost basis with really no effort on the business side