eBay Goes Up Against Groupon with Lifestyle Deals

Groupon’s troubles just keep on piling up. As if it weren’t troubled enough already by a sagging stock price and its failure to turn a profit, today, eBay, the original internet e-commerce giant, started testing an online deals offering, which would compete directly with Groupon’s core offering – daily deals.

The new feature is called eBay Lifestyle Deals, and is being tested out in some urban areas like San Francisco, Los Angeles and Washington D.C.

Groupon already has tremendous competition in the space thanks to Google Offers and LivingSocial which is bankrolled by Amazon. While the daily deals space has yet to mature as a market, it is the next natural step for many e-commerce providers, since it is a nice way to improve sales and increase inventory turnover.

eBay already provided product deals, but is now also looking into deals on services, which could be even more lucrative, partnering with deal providers who arrange them with local businesses and merchants.

eBay is also looking to completely revamp its complete website to boost sales and modernize its brand image. It’ll be interesting to see how the daily deals wars play out after the entry of eBay.

via Reuters

Groupon Acquires Savored, a Restaurant Reservation Startup

Groupon has been one of the more prolific startup acquirers in recent history, besides Google, Facebook, and Zynga. Following the IPO, it had a significant infusion of cash which enabled it to fund its loss-making core business, and acquire a number of startups which let it expand its range of offerings, in its bid to become the “operating system” for local businesses.

Today, it announced the acquisition of Savored, a startup in the restaurant reservations and discounts space. Savored is used by more than 1000 restaurants and offers discounts to customers when they book through its platform. It helps restaurants with yield management, and even out customer traffic during peak times. Savored will be a great addition to Groupon’s offerings for restaurants and other similar small businesses. It will be merged with Groupon Now.

Here’s the official press release by Groupon, announcing the acquisition:

Groupon (http://www.groupon.com) (NASDAQ: GRPN) announced today it has acquired Savored (http://www.savored.com), a leading provider of reservations at the best restaurants across the United States. Terms of the deal were not disclosed.

More than 1,000 restaurants nationwide have used Savored’s unique platform for yield management. After booking a reservation on Savored.com and visiting the restaurant, diners enjoy up to a 40% discount applied automatically to their bill. Merchants enjoy incremental revenue for tables that would otherwise be empty, and consumers are incentivized by the ‘built-in’ discount and roster of high-end eateries to explore.

“Savored’s platform nicely complements Groupon’s efforts in yield management, an area we’ve pioneered with Groupon Now!,” said Dan Roarty, VP of Groupon Now. “We look forward to working together to achieve a common goal – making dining out even more fun and affordable for consumers while helping restaurateurs manage inventory and grow their businesses.”

Groupon Q2 2012 Earnings; Revenues Grow 45%

Groupon announced its earnings for Q2 2012, with revenue improving 45% to $568 million, even after significant foreign exchange rate moves against it. Gross billings increased 38% to $1.29 billion, while operating income increased to $46.5 million.

Groupon’s North American revenues grew 66% while its international revenue growth was close to 30%. It also managed to bring its customer acquisition and marketing costs down significantly.

Mobile usage has continued to increase and adoption of its merchant tools also continues to rise, which should help it in its mission to become the “operating system” for local merchants.

Groupon ended the second quarter with its cash and cash equivalents standing at $1.12 billion.

Q2 2012 was the first quarter for Groupon with material direct revenue, generated through the sales of its own products and services. We expect that to become a sizable portion of its total revenue mix in the coming years.

Andrew Mason, CEO of Groupon, said:

“We had a solid quarter despite challenges in Europe and continued investment in technology and infrastructure. We’ve deepened our relationships with a growing base of merchants and customers worldwide, demonstrating progress as we work to unlock the opportunity in local commerce.”

Groupon’s stock crashed nearly 20% after it reported these numbers, and stands much below its IPO price.

via Groupon – SEC

Nokia Provides More Evidence of Being the “real” Windows Phone Maker

Nokia Lumia 900

On May 8, at the CTIA Wireless 2012 show in New Orleans, Nokia announced that they are partnering with a bunch of top-tier brands to bring their various apps and games to Windows Phone, with a lot of those apps and games being exclusive to Nokia’s Lumia line of Windows Phones.

Some of the highlights from their press release:

PGA Tour (exclusive to Lumia for 12 months)

In addition to live tournament scoring, highlights and player information, the app provides interactive, augmented coverage of select events and holes, showing each player’s exact position and scoring information. This allows fans to “get inside the ropes” and follow all players competing on the PGA TOUR.

ESPN (exclusive to Lumia until May 2013)

This app already exists on the Lumia devices, and is in addition to the ESPN ScoreCenter app that is available to all Windows Phones. The Lumia app will see some functionality updates and in addition, the ESPN Fantasy Football app (another Lumia exclusive) will be made available later in the Fall to align with the NFL season.

Rovio

After a back-and-forth on whether they are going to build Angry Birds Space for Windows Phone or not, Rovio is now building a dedicated design and development team to create games for Lumia and other Windows Phone devices. That’s quite a scoop for Nokia from the rather negative start that the game maker had with Microsoft and Windows Phone.

Nokia and Rovio will partner to develop innovative new consumer products and content exclusively for Nokia Lumia smartphones, alongside cross platform multi-channel integrated marketing initiatives.

EA

EA will be bringing some of their most popular titles to Lumia and other Windows Phones, including FIFA, Madden NFL, NBA Jam, Tiger Woods PGA TOUR®, Mirror’s Edge and Yahtzee to add to the several titles they already have in the Windows Phone Marketplace.

Groupon (exclusive to Lumia for 6 months)

There is already an official Groupon app which is going to get some major updates, including a cool and innovative augmented reality feature to find deals near you.

Tripdots (exclusive to Lumia for 3 months)

Tripdots helps vehicle owners optimize their driving behaviors while connecting with other vehicle owners and sharing driving efficiency achievements via social networks. The app lets users monitor the operation of their vehicles to enable cost savings through better understanding fuel economy.

PayPal

Yet another “key” app missing in the Windows Phone ecosystem is for the popular PayPal service. PayPal is going to work with Nokia to not only bring their app to Windows Phone, but also use functionality like Live Tiles to enhance the user experience.

AOL Entertainment Hub (exclusive to Lumia for 3 months)

Whether you want to listen to one of 55,000 radio stations via SHOUTcast, stream free music albums with AOL’s Listening Party or view Trailers and Movie listings, the AOL Entertainment Hub delivers everything you need.

Yet another app where Live Tiles are going to be used to enhance the user experience:

“The live tiles on Nokia Lumia helped us create an awesome app that makes it easy to stay in the know on what’s happening in Film, TV, Radio, Concerts and Music right from your home screen,” said Sol Lipman, Director of Mobile First products at AOL.

TIME magazine

Utilizing the stunning Windows Phone UI, the app will enable users to view TIME.com content, receive breaking news alerts, watch rich media content including video and share stories via the Windows Phone People Hub, while delivering the latest news and stories to users first via Live Tiles.

Newsweek – The Daily Beast

The Daily Beast app delivers the latest content through Live Tiles and combines the unique style of The Daily Beast with the Windows Phone UI to deliver a stunning experience. For users who only have minutes to digest the latest news, the app also delivers The Cheat Sheet – your one stop must have reads from across the world – uniquely designed for Windows Phone.

Box app for Windows Phone

Box, another oft-requested app, will finally come to Windows Phone with support for nine languages.

 

Zynga’s IPO is Finally Here; Roadshow Starts December 5

Zynga’s public offering has been one of the most awaited tech IPOs of all time. It filed its first S-1 IPO filing back in July 2011, and has filed more than 6 amendments to the original filing since, with updated numbers and user metrics for its games.

It was supposed to go public before Thanksgiving, but obviously, that didn’t happen. According to a report by Fortune, Zynga will kick off its IPO process with a roadshow on December 5. We may soon see its last S-1 amendment, which should lay out all the details, including the number of shares it plans to offer and the exact valuation at which it expects to go public.

Zynga is planning to raise nearly $1 billion, at a rumored valuation of around $15 – $20 billion. However, given the bloodbath that Groupon’s stock has seen in the last week, its underwriters may price it lower to attract investors.

Unlike Groupon, Zynga is a profitable business and hasn’t been mired in controversies (at least not as many as Groupon). It has made nearly $828 million in revenue in the first 9 months of 2011, with a run rate of more than $1.1 billion, but its profits have dropped significantly due to increased operating expenses.

It was recently in the news for forcing some senior employees to return some of their unvested stock and threatening to fire them if they refused to, but that isn’t really much of an issue. A major concern has been the drop in the number of monthly active users, the primary metric which determines its growth. Most of its new games except CastleVille and Words with Friends have peaked early, and are already seeing a drop in active users. Zynga will need to continue churning out successful new games to compensate for the drop in users playing its older games, which is becoming difficult in the increasingly competitive social gaming market.

My analysis suggests that Zynga’s fair valuation should be in the range of $10 billion to $15 billion, based on a range of user and revenue growth estimates. Let’s wait and watch how it plays out for Zynga.

In other news, even Facebook is expected to go public soon.

The Groupon Bubble Has Burst

Groupon is possibly the most hated (by analysts) technology startup since the dot com bubble. It is the fastest growing company in terms of revenues, but it has been lambasted ever since it filed its first S-1 filing months back in order to go public. While everyone was first awestruck at how defiantly Groupon refused Google’s buyout offer of around $6 billion, once its financials were revealed, almost all analysts turned against it.

It had a very turbulent journey to the IPO – with issues like shady accounting measures, leaked memos in the quiet period, insiders and early investors cashing out early – but it finally listed with a significant pop – at around $25, reaching a high of $31. Its stock price was helped by the fact that it had a very small float, and that shorting it was too expensive.

However, in the last two days, it has shed most of its gains, and is now priced below $17, about 15% lower than the offer price of $20.

Groupon

It’s trapped in a catch-22 situation – if it tries to bring down its marketing expenses, customer growth also drops. And if it doesn’t, it doesn’t turn a profit. Additionally, due to increasing competition by Living Social, Google Offers and the other 1457 daily deal players, its margins are getting squeezed. There is almost zero loyalty in the daily deal business – after all, coupon clippers will jump on to the cheapest deal, which may not necessarily be Groupon’s. It hasn’t been able to capture significant market share in most of the international markets it operates in, and deals in North America remain its largest business.

The stock still seems to be a bit overvalued and may drop even more in the coming days. The Groupon bubble has finally burst and the bloodbath doesn’t seem to be over.

Zynga, which was planning an IPO in the week after Thanksgiving, may have to consider postponing its IPO a bit more, considering the turbulent market conditions and the possibly low confidence of investors in tech stocks right now, after the Groupon debacle.

The Facebook IPO is Coming!

Finally, we have some news about the most awaited IPO of the year – Facebook. Apparently, a rumor is floating in Facebook offices that the social networking giant will file its first S-1 before the end of 2011. Mark Zuckerberg has himself said that it is coming, according to a report by Business Insider.

Facebook has long surpassed SEC’s 500 shareholder limit because of which it will be required to disclose its financial data to the public before the end of April 2012.

There are mainly two main reasons why companies choose to remain private – secrecy and control. After it’s forced to disclose its financials, it will lose the advantage of secrecy. Going by the current trend in tech companies, Mark Zuckerberg will be able to maintain a significant amount of control even after going public, thanks to supervoting shares.

It is rumored to have a valuation of around $80 billion currently, and I expect it to go public in the $100 – $120 billion range, assuming it has continued to grow at the same rate in the past few months.

Going public will also enable Facebook to keep its employees happy, by giving them a way to cash out, and become actual millionaires, not just paper ones.

Going by the encouraging response to the Groupon IPO despite being fraught with problems, I expect Facebook will easily be able to list at a $100 billion+ valuation.

A lot of newly minted millionaires are going to be roaming around Silicon Valley soon, thanks to companies like LinkedIn, Groupon, Zynga, Yelp and now Facebook going public.

AmazonLocal: Amazon Launches It’s Own Groupon Competitor

 

When Andrew Mason launched Groupon in 2008, he would never have imagined that his brand would create a   whole new industry. Even though Groupon is still the market leader, hundreds of other companies have since emerged adopting the same business model of offering local deals powered by group purchasing. This year alone, we have seen giant brands like Google and AT&T jump on the band wagon and the latest one to add to the list is Amazon.

AmazonLocal which has been launched within past few hours is Amazon’s own version of Groupon, or for that matter, LivingSocial in which Amazon invested $175 Million last year. You can choose your city to view local deals offering products and services at a discount of at least 50%, however, AmazonLocal only displays deals for Boise,ID right now and will be coming to more cities soon. Similar to other competitors, you can also subscribe to get daily deals in your inbox, see how many people have purchased a specific deal, and view/print the deals that you have already purchased. Interestingly, a little note under today’s deal says “Sold By LivingSocial”, so it is not entirely clear yet if AmazonLocal would be it’s own separate entity or just another front for selling deals that are powered by LivingSocial.

Amazon’s entry in this market increases competition several fold and it will be interesting to see if a lot of consolidation and acquisition is seen within the next few months.

 

What Google Offers Means for Developers and for Groupon

Finally, we know what Google wanted to do with the Groupon acquisition. Groupon’s current users base and its vast expanse across all other countries would have allowed Google an easy access to deals across the world. However, Groupon was prompt enough to keep the deals space competitive and not get acquired by Google. Flying solo now, Google has brought it’s own deals service, Google Offers.

google-offers

With Google offers, Google aims to provide great deals up to 50% off or more. The service is just out of Google incubators and is available in selected cities. Though, it is expected to expand and spread further collaborating with other local services. This will probably start an acquisition war between Google and Groupon.

The key selling potential of Google is the deal offer of 50% or more. This will attract users and all they need is to sign-up for email alerts on deals. Google explains Offers as,

Today we launched a marketing campaign inviting Portlanders to sign up for a test of Google Offers — to get great deals delivered right to their inboxes. Offers is part of an ongoing effort at Google to make new services that give consumers great deals while helping connect businesses with customers in new ways.

Google has an awesome list of APIs and in future, if Google releases a proper deals API for its Offers sevice, it will be the first of its kind and will be an absolute hit with developers working on location based software. I have missed a consistent deals API in my current project as most of the APIs are provided exclusively for a certain location. Though now, Google is here to fill the void and will open the doors to yet another competitive dimension within location based applications.

If you were not catching up with all the buzz about Google Offers, have a look here. Additionally, here is a YouTube video explaining what Google offers will offer us.

Google Offers Accepting Subscriptions for Portland, NY and San Francisco

Speculation about Google’s own Groupon-like portal have been going around ever since Groupon rejected the $5.3 Billion offer made by Google. These rumors were later confirmed when some users spotted placeholder pages for the URL Google.com/offers.

Today, Google is taking the much anticipated service one step closer to launch by starting a BETA service for the cities of Portland, San Francisco and New York. Even though all you can do right now is subscribe to receive emails for offers related to one of these cities, the message posted on the page confirms that Google Offers would be something very similar to Groupon in terms of its features:

Once signed up, Google sends you a confirmation email saying:

Thanks for subscribing to Google Offers BETA – NYC Midtown! We’re excited that you’ve joined us as we partner with some of the best local businesses in your area to bring you great deals at 50% off or more.

Once Google Offers is available in NYC Midtown we’ll send you regular emails letting you in on amazing offers in your area.

We’ll be in touch.

-The Google Offers Team

Google is also accepting submissions from local business who want to partner up with Google to offer their products:

An interesting thing is that Google Offers displays a zoomed-in map of the city you are subscribing for. This can definitely be an indication towards a strong integration of Google Maps and more location based features then sites like Groupon and LivingSocial currently offer.