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Did Groupon Miss It’s Narrow Window of Opportunity?

Did Groupon Miss It’s Narrow Window of Opportunity?

Many social media phenomena, when dissected, are rather simple conceptual models. Facebook was nothing technically sophisticated, nor Twitter. There were unique and revolutionary, but certainly not scientific breakthroughs (social-economic impact aside).

So, many social media businesses and sites have a huge potential problem ahead: low barrier to entry for would-be competitors. Usually the only hurdle is adoption. And of course that is HUGE hurdle. Sure, you can build Facebook2.com, but will anyone care?

So what if your competition could remove that final barrier to entry – adoption? Then you’d really be screwed, no?

So by now (thanks for reading this far), you’ve probably realized I’m going to mention Groupon’s rejection of Google’s $6 billion larger-than-life buyout offer. Most of us, myself included, probably don’t have access to the “bullet points” that Groupon used to justify rejecting the offer.

But here’s the problem. The technology and concept are extremely simple. So the only barrier to competition is adoption by users. Google doesn’t really have a handicap in this area. After all, Groupon gets all its users by advertising on Google.

So Google just announced that it will be launching it’s own social buying experience to compete head on with Groupon, and it’s called “Google Offers”.

Google has the technology, concept and reach, so I don’t expect it to be long before it becomes a serious threat to Groupon. I do believe that many of these services CAN co-exist. After all, they are just coupons… and Americans love coupons. I believe there are enough local deals to go around to support multiple vendors. Social Living is competing and co-existing with Groupon quite nicely, so there’s probably room for a 3rd competitor. There are many smaller local competitors too.

But, a year from now, I wonder how much Groupon will be worth to its investors and whether or not that $6 billion “no thank you” was a smart decision.

 

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