Groupon will be offering an IPO on it’s share this week, a much anticipated move by the company which has grown so rapidly over such a short period of time. From 152,000 users in July of 2009 to around 143 million users this past September, the company certainly has a lot to boast about. Yet with leaked email accounts from the CEO claiming, “We’ve invented something that is catalyzing millions of dollars of local commerce every single day in 45 countries and fills the lives of millions of customers with unforgettable experiences — it’s pretty remarkable,” is this truly the next big internet IPO to keep your eyes on, or just a desperate attempt to regain footing?
I’ve personally had plenty of friends who have indulged in Groupon and enjoyed its services thoroughly. And why shouldn’t they? The site provides remarkable deals to those willing to pay attention. Merchants can also enjoy the services as they are able to put their business on the map, even getting services during times that may be a lull (say, a midweek lunch). Yet there are several difficulties that arise on both ends of the spectrum.
For one, Groupon often proves to not exactly be a saving grace for a company. For the vast majority of users, they tend to come into the business for the massive discount and then never come back, a waste of money for those who provide the service. And as for the customers? Well, while Groupon may have been original when it first entered the scene, like most popular ideas, copycats have emerged. And while there will always be only one Groupon, the sad truth is that Groupon doesn’t exactly offer a service which is remarkably unique: it is easy to copy their business model and show no signs of faltering.
During the IPO, the shares will go for somewhere between $16-$18. And since it is an IPO, you can probably expect the prices to rise for the short term. Yet Groupon has not shown any signs of a future: rather, they seem to be relying upon the past and hoping that it can take them into the future. It won’t. Until Groupon can figure out exactly what will make them unique, Groupon will only witness’ it’s successes evaporate. That would be the ultimate disappointment.