Groupon fails to resolve dispute

[Scott.L]

http://www.theaustralian.com.au/bus...-pioneer-groupon/story-e6frg8zx-1226006582495

Mediation failed to resolve a dispute over ownership of the trademark and the Groupon.com.au domain name.

 

[James]

I think Catch of the Day should just give up the domain and save them a shit load of costs, this is blatant domain squatting and makes all domainers look bad.

What are they thinking they will act like compete jokers and Groupon will buy their whole company.

 

[Ash]

No ethics, and it's going to cost them.

On another, almost related matter... I feel good because today I alerted a company that their exact match domain was available on netfleet and it looks like they bid on it - and it only cost them $10.

Someone should do a news story on that... compare and contrast domainers/squatters.

 

[DavidL]

No ethics, and it's going to cost them.

On another, almost related matter... I feel good because today I alerted a company that their exact match domain was available on netfleet and it looks like they bid on it - and it only cost them $10.

Someone should do a news story on that... compare and contrast domainers/squatters.

Good on you - I hope they send you a bottle of something (they were first bidder so only paid reg!).

 

[Scott.L]

It seems Groupon are finding it difficult in other countries

http://blogs.reuters.com/george-chen/2011/02/07/no-bargains-in-china-for-groupon-com/

the gist of it is, Both Groupon.cn and Groupon.com.cn, its first and most obvious choices for a local web address, have already been snapped up by a Groupon.com copycat.

 

[WG2010]

Meh, f*ck Groupon... Who the hell turns down a 6 billion T/O offer? Google would have taken it to the next level.

They've been baiting Australians with fake macaroon offers for weeks now, poke fun of the situation in Tibet and some would claim have shady sales reps who get operators to put up prices and then discount them down.

So, let's not make out Groupon never put a foot wrong and Scoopon are the only ones doing shady things to protect their business (which I'd argue anyone here would do as well).

 

[James]

Meh, f*ck Groupon... Who the hell turns down a 6 billion T/O offer? Google would have taken it to the next level.

They've been baiting Australians with fake macaroon offers for weeks now, poke fun of the situation in Tibet and some would claim have shady sales reps who get operators to put up prices and then discount them down.

So, let's not make out Groupon never put a foot wrong and Scoopon are the only ones doing shady things to protect their business (which I'd argue anyone here would do as well).

Sure Groupon has made some mistakes with their TVC's they have appoligized and now taken them off the air. I think the hidden message was that big dollars were donated to charity over that campaign, greenpeace was even endorsing it.

Scoopon just needs to pick up their game and offer something different to groupon. I think the tactics they are using to get a sale were just way too dodgy.

But yeah they knocked back the offer becuase they want to go it alone I mean they got 1 billion in funding this year alone and are making shitloads. Facebook knocked back mutli billion dollar offers now they are kicking ass.

 

[Ash]

Good on you - I hope they send you a bottle of something (they were first bidder so only paid reg!).

Thanks David. I doubt it though, they seemed quite sceptical of me when I called.

 

[DavidL]

But yeah they knocked back the offer becuase they want to go it alone I mean they got 1 billion in funding this year alone and are making shitloads. Facebook knocked back mutli billion dollar offers now they are kicking ass.

Facebook is way more sustainable and solid a business model than the Groupon model though. Surely a lot of this valuation is due to hype?

I mean these deal-a-day websites can't make much money can they? Maybe I'm missing something but do they work something like this:

• Site offers an amazing deal each day from say 100 retailers in different geographic areas. Each deal is 'Limited to 100 vouchers'
• Retailer's deal has to be special so let's assume the retailers break even at best on the deal
• However they get 100 new customers through their doors (who may come back) and great exposure on a big website
• Say they value the excercise at $1,000 for branding (which is heaps surely considering they get exposure on 1/100th of the website for one day)
• So they are happy to pay $500 to Groupon

So Groupon's total revenue is a lousy 100 x $500 = $50K

Tell me what am I missing? For that they have to promote the site, signup retailers, invoice etc. Isn't growth potential limited by the whole concept of focusing on one deal only? Couldn't the whole idea just fizzle out as people tire of seeing offers that really don't do it for them?

Anyway, annual revenue (based on these figures) is $18m. Net profit $10m at best (probably negative right at the moment because so new but once stable mayb that's it?)

Google's offer 600 x earnings and they said no?

Note: I haven't looked fully into this so maybe I've got it completely wrong. let me know!!

 

[Shane]

Facebook is way more sustainable and solid a business model than the Groupon model though. Surely a lot of this valuation is due to hype?

I mean these deal-a-day websites can't make much money can they?

Groupon sold $11 million worth of GAP vouchers in a single day last year! Not sure what their cut is, but even at 20% you're looking at $2.2m for the day.

 

[DavidL]

Groupon sold $11 million worth of GAP vouchers in a single day last year! Not sure what their cut is, but even at 20% you're looking at $2.2m for the day.

Wow! That's impressive.

However those vouchers would have been huge deals I would imagine so probably a break even or a loss leader for Gap. So wouldn't Groupon's earnings just have been an advertising fee rather than a cut of redemptions?

 

[James]

Groupon takes like 50% commission or something crazy.

Even in Australia these sites take like 30-40% commission on takings.

Why do you think Spreets sold for 40 million, the company was making around 4 million a month.

While the 50% commission that Groupon charges is high, there are currently far more willing businesses than Groupon slots available, so it can charge an extreme rate. Over time, as more clones and competitors enter the market, I expect that commission rate to drop into the 20%–30% range. In your market, figure out which social buying companies are active, and then talk to all of them. It doesn’t matter if you don’t go with the biggest and the best; in fact, the smaller deal sites have a tremendous advantage.

I agree it is not really a long term business model, because so many deals sites have now popped up I mean their are like 50 well known ones in australia so commission rates DROP DROP DROP to rates like 2.5% because they are unknown.

 

[DavidL]

Cool thanks James. That shows the value for Groupon at the moment but now seems crazy for advertisers. I just can't grasp the balance that's going to make it work longterm.

Eg http://www.groupon.com/los-angeles

Today's los angeles deal. Some little hairdresser is offering a $125 haircut for $49. So Groupon get's 50% meaning the hairdresser nets $25 for each person. Surely they lose big money with that?

I agree it is not really a long term business model, because so many deals sites have now popped up I mean their are like 50 well known ones in australia so commission rates DROP DROP DROP to rates like 2.5% because they are unknown.

That's why they should have taken the 6 large ones!!

 

[zhenjie]

Surely they lose big money with that?

The business that do sign up for these should know that it is a major loss leader for them. Lots of controversy as to how sales reps from these sites tend to over exaggerated the benefits or downplay the extra resources/losses required by the business to cater for popular and oversold deals.

 

[WG2010]

They're are at it again advertising fake sushi deals in Sydney.

 

[zhenjie]

With a disclaimer now though

 

[James]

Cool thanks James. That shows the value for Groupon at the moment but now seems crazy for advertisers. I just can't grasp the balance that's going to make it work longterm.

Eg http://www.groupon.com/los-angeles

Today's los angeles deal. Some little hairdresser is offering a $125 haircut for $49. So Groupon get's 50% meaning the hairdresser nets $25 for each person. Surely they lose big money with that?



That's why they should have taken the 6 large ones!!

But check this out some feedback from CUDO customers in regards to deals, for example they get the customer in for the cut at a loss but then they charge a shitload for a blow dry -

I've bought a couple of coupons from Cudo, here's my feedback:
- $89 hair cut and colour deal for Vija Salons in Spring Hill. They gave me one of the worst hair cuts I have ever had, it was the complete opposite of what I asked for and the picture I pointed out. After it, I went to the register and they only then told me I had to pay an extra $50 for the "extra dye".
- $30 all you can eat pizza deal for two at Naples Pizzeria in Ashgrove. I called them this evening to make a booking and they said they are no longer accepting Cudo customers because Cudo has not paid them a dime since the deal went live 3 weeks ago.
I've sent Cudo an email just now requesting a refund for my pizza coupon, and I gave them feedback about the hair cut. It will be interesting to see how they respond.

 

[Vicstar]

One of my businesses took part in a daily deal & took in quite a few Voucher sales.. I must say the exposure was fantastic. We received a reasonable amount of clientele that would have normally not come our way - with a few extending their services with us (paying extra) & introducing new supporters (FB fans, word of mouth etc).

The organisation took their 20% commission, then held another 20% after than in "trust". At the end of the voucher expiry date (eg. 6 months), depending on how many people redeem their vouchers, we receive a portion or all of that 20% back (pro-rata) - but only based on whether we redeem over 80% of all vouchers within those 6 months.

Looking further into the Contract vs. our Payment Received, a smarty pants paid us a straight 40% of the total revenue with a rather vague invoice.. This works out considerably different to first taking out 20% Commission, then paying us 80% of that balance (as per their contract terms).

It is currently under investigation (and denial) via their Accounts dept.... I have a knack for finding intricate account errors which results in defensive Accounts people The last "Accounts girl" that attempted to battle my reconciling ended up getting the sack from their boss & I got an out of court settlement!

wish me luck...

now where can i get some of that fake sushi......

 

[jmeery]

Hey Vicstar.

I run Deals.com.au, and any Daily Deals site that withholds anything from you other maybe 10% for refunds, is really taking you for a ride.

The reason our competitor sets the "redemption hurdle" at 80% is because the reality is, that almost all deals will have below 80% vouchers redeemed, no matter how good they are. This means that you are effectively being charged 40%. They are taking you for a ride.

We try to be as honest and upfront as we can with businesses as to what they are signing up for. If vouchers aren't redeemed for deals run on our website, it is the business running the promotion that benefits and their cost of running the promotion is reduced. Unlike some of our competitors.

 

[sasha]

hey jmeery

i have sent you a "pm" as im trying to get in touch with you