We have talked about the LivingSocial v. Groupon situation here before. It’s always interesting how readers respond. There appears to be a very misguided line of thinking that Groupon has the lead in the daily deal space that is insurmountable and all others should just fold up their tents and call it a day.
Well, Amazon didn’t just give LivingSocial $175 million because it was feeling generous. It did it because it felt like there was room to take a shot at Groupon. If the traffic chart below from Experian’s Hitwise is any indication they may be right.
The key right now is that LivingSocial has to maintain the momentum that was generated by their Amazon gift card play earlier this month. That show of strength did wonders for the brand and took a bite out of Groupon’s traffic as well. If they let it go though and don’t push to keep the interest level high this could end up just being a one time event that will be a blip rather than a trend.
I think the whole Groupon frenzy has shown just how quickly things can get out of control in this current market. Groupon apparently thumbed its nose at Google’s $6 billion offer then has recently tried to tone down IPO talk that was placing the company at a roughly $15 billion valuation. All of that seemed to happen too quickly to be real and this quote from a Crain’s Chicago Business article this week shows that Groupon may be trying to dial back the hype a bit.
Groupon Inc. hasn’t decided whether to go public, board member Eric Lefkofsky said.
“There’s no definitive answer,” Mr. Lefkofsky said Tuesday. “We’ve made no decision at the present moment whether we will or won’t. We’re talking to bankers. We do talk to bankers all the time.”
Speculation about a potential Groupon IPO has been rampant in recent weeks, but insiders are downplaying the idea. Groupon CEO Andrew Mason told reporters Monday in Europe: “We’ve met with a bunch of bankers. We’re exploring whether or not it makes sense for us.”
Now the dust is starting to settle and the hypnotic hold Groupon seemed to have on everyone is being lifted a bit by a competitor. This is the kind of thing we all had hoped for in the search space so Google would have to try harder. In an area as new and as repeatable as the daily deal space there may be some hope for at least two real players to emerge if these traffic reports are any indication. Oh and let’s not forget that Google is working on its Offers offering which may or not get traction but at least it’s being done with a huge cash war chest to support it.
What’s your take on the daily deal space? Is it being over-hyped? Is it the future? Will Groupon stay out in front or are they truly vulnerable?