Thursday, November 18, 2010

Predictions on Groupon

Yahoo rumored to want to spend $3 billion on Groupon.

This reminded me of a conversation I had recently with a few tech savvy friends that said that Groupon would be the next Big thing in the next year or two. I was skeptical since while I believed the idea was sound, it is an industry with low barriers to entry, and in its inchoate state, it is unclear who will emerge as victor (say Gilt, or one of the dozen other similar companies Yahoo has been partnering with recently).

Does this industry have a buzzwordy name yet, btw, dot-brick perhaps?

My friend replied that the difference is that groupon requires local relationships. Which it could then monopolize. Perhaps.

The Yahoo! deal perhaps suggests my friend was right, though Yahoo also reminds us that a company that looks dominant early on can still fall.
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