Perspective: Let’s Not Underestimate the Significance of Groupon’s Legacy

Groupon’s 2010 decision to sell the Chicago-based online deal company to Google for 5.75 billion dollars will be remembered as one of the worst blown calls ever in the history of electronic commerce. It ranks right up there alongside Blockbuster’s refusal to purchase Netflix for $50 in 2000 and Mark Zuckerberg’s rebranding of Facebook as Meta, where he spent upwards of 100 billion dollars developing a ghost town Metaverse, where the avatars do not even have legs.

Of course, there are nuances to be considered. Google’s inability to guarantee that the deal would be completed was one of the reasons Groupon declined the offer. A long antitrust review could have been fatal for a business without a “moat” that would keep competitors at bay. This led to a rush to enter new markets, spend millions of dollars on marketing and incur huge losses.

Forbes announced on its cover that Groupon was the fastest growing company in history. It launched late 2008 and has been around ever since. It was the fastest company to reach $1 billion in sales. Its approach was not sustainable.

Groupon could run out of money in the next few months after issuing to investors. This is unless interim — a strategy that relies on “refocusing its core local-merchant business, improving technology,” and cutting costs via artificial intelligence-driven automaton, according to Crain’s John Pletz – pays off, or the company sells itself. Groupon’s current market capitalization is around $100 million. A sale of this magnitude would fetch pennies per dollar when compared to Google’s original offer. This would be the ultimate Groupon offer.

If this is Groupon’s last act, it will evoke end-of-an era sentiments similar to Gen X’s reaction when MTV News announced its closure on May 9. Groupon, which was fueled in part by Great Recession-era belt-tightening and the desire for retail bargains among consumers, boasted 150 million daily email subscribers by November 2011, when it went public.