group buying Archive

It seems all the big names want to get into the group buying craze before it dies. Today’s entrants into the group buying fun are Skype and Microsoft.

Microsoft is offering Microsoft Office Professional Plus 2010 Windows Download for $99 via 1SaleADay. The overview says the Professional Plus version includes: Word, Excel, PowerPoint, Outlook with Business Contact Manager, OneNote, Publisher, Access, InfoPath, SharePoint Workspace, and Lync. A number of people on some of the deal sites are questioning if this is a legit deal so you may want to read the forum posts before you buy. Amazon lists this version of Office at $410.

Skype is offering three-months (affiliate link) of their Premium service for $10 via Groupon. It appears the deal is located in the Chicago section of Groupon so just navigate there when you arrive at Groupon. It looks like the main benefit of Skype premium is group video chat – you can also video chat with customer service. Skype is promoting the Groupon deal on the skype.com homepage. It appears the Skype-Groupon deal begins later today.

It’s interesting to me to see the big brands promoting their group buying deals on their websites while the small businesses are not promoting their deals. I guess maybe the difference is quick revenue bump vs. lead-gen?

Do you remember the scene in the movie The Rock (no, not that jabroni Rock) where Sean Connery pushed agent Womack over the penthouse balcony? How would you like to stay in the same penthouse suite for 50% off (actually the deal appears to be only 20% off but whatever)?

LivingSocial is running a deal they call “affordable” for the next week for $10,000. If you are located in San Francisco or planning to visit, you could purchase a one-night stay in the penthouse suite at the Fairmont hotel. But you don’t just get a night in the hotel that is up a hill that you will die walking up, you also get to take home the Tiffany forks and knives used with your four-course, private chef prepared meal. The penthouse suite features three bedrooms, a billiards room and a dining room table that seats 60.

You can also drive the Penthouse Maserati Quattroporte for the day. Imagine how awesome you would look driving up to the next tech conference to present your startup in a Maserati! What’s the best part about this deal? They include free Wi-Fi!

In case you are wondering, at the time of this post, 47 packages have been purchased. This does not mean that everyone paid full price because you can use LivingSocial deal bucks on this deal and you can refer others to the deal which would make your deal free.

All web services handle high web traffic in different ways. Twitter has their fail whale and Tumblr has an Error message. Group buying service Groupon handles high traffic differently. Groupon blocks customer logins during high-traffic periods. Today Groupon is running national deals with Fandango for movie tickets and Barnes and Noble for books and based on deal board traffic, it looks like Groupon is getting hit with a traffic surge.

As you can see below, if you attempt to login to make a purchase, print a coupon or view your account, the note below is presented. It states that the login functionality is not available due to extremely high demand. They suggest you make an order using the same email address as on your account. Many deal hunters are upset because there is a concern that Groupon’s deal bucks might not be applied to purchases since they aren’t logged in (there is a fine print notice that deal bucks will be applied if they are in your account when your order is processed).

The other issue with no ability to login is that you can’t easily print or retrieve your purchased Groupons. The message on the login page does provide an email address if you need to print or redeem a Groupon immediately but I have to imagine that email address will be hammered. I mean when a person wants to visit the spa for a 50% off double wax latte foam stone rock mineral water back massage, they want it now!

I like this tactic by Groupon because it keeps the ordering process working – this is critical for a site that offers time-based purchases.

During LivingSocial’s 24 hours of Amazon, the site was up and running the entire time and you could login but it took 2-3x longer than normal for LS to process all of the orders.

Two weeks ago group buying service LivingSocial offered Amazon gift cards for 50% off. They “sold” over 1 million of the cards in a 24-hour period.  As you can see I put sold in quotes – I still need to do a recap post about the deal – I have a page of notes around how many cards were actually sold and how many people “bought” more than one gift card.

Today I am hearing from many deal boards that Groupon will be offering a deal for purchases at Barnes & Noble. It’s only a rumor at this point since the deal isn’t live yet but so far it looks like you will be able to buy a $20 BN gift card for $10 – a 50% savings. Basically the same deal terms as the LivingSocial/Amazon deal above. There is some talk about the deal on a Lubbock, Texas deal blog.

Update 3:30pm Eastern – the Barnes & Noble Groupon deal is now live.  There are a TON OF TERMS – so make sure to read the terms – looks like if you don’t use the coupon fast, they will deduct $10 from the value. If you use the link in this paragraph and it’s your first Groupon purchase, I get a credit.

Apparently the deal will be promoted on Friday but will be available this afternoon. There are some questions based on content that is floating around. The term ‘BARN” is used in the copy which most seem to believe this means Barnes & Noble but some wonder if the deal is with Borders. But Borders is considering bankruptcy so I doubt the deal would be with Borders. If the deal is with Barnes & Noble, I don’t know if it’s really that great of a deal since you can find 50% off coupons all over the web.

I will update this post if I can find out more details about the Groupon deal. And once it goes live I will post another update.

I doubt this deal will surpass the Amazon deal but it should certainly get those Groupon registers ringing.

The big chatter this Cyber Monday morning comes from Vator.tv who has found some details that Google has acquired Groupon for $2.5 billion. The notion that Google will acquire Groupon has been going on for a while now with Kara Swisher reporting on Google’s interest earlier this month.

If we look back to Google’s acquisition of FeedBurner in 2007, Google quickly killed one of the most awesome display advertising programs and replaced it with AdSense for RSS Feeds which frankly has been a big dud.

While Groupon and FeedBurner are completely different services, my fear is that if Google does acquire Groupon, the Groupon Adwords spend will be gone – replaced with “house” ads that pay close to nothing pushing the new service.

Earlier this year AdAge posted some internal Google documents that showed the biggest spenders on Google AdWords. Groupon competitor Living Social was listed as one of the top Google AdWords advertisers with a total spend of $2.29 million for June 2010. When was the last time you visited a website and didn’t get hit with a cupcake image ad for Groupon or a burger image ad for Living Social?

As the group buying category continues to grow, all of the companies in the space are spending mad money on Google AdWords. These ad buys flow (after Google’s cut) to web publishers. I also wonder what will happen to the local advertising space if these group buying sites begin to get acquired en masse.

Other forms of advertising that would most likely be terminated if Groupon is acquired by Google include cashback and CPA deals with a variety of the deal sites.

Selfishly, web publishers should hope that Groupon doesn’t sign the acquisition documents. For (at least) the short-term, it would mean a larger AdSense check.

And just to be clear, Groupon should take the money.

During his talk at Startup School earlier this month, Groupon CEO Andrew Mason noted that the company is working towards launching Groupon 2.0 after they master Groupon 1.0. Mason also mentioned that there is a six-month backlog of merchants that want to be featured on Groupon. Could a self-service option be the Groupon 2.0 Mason referred to?

A variety of startups have launched offering ways for companies to offer group buying deals on their own without the need to go to Groupon, Living Social and the other current group buying services. Groupon currently has over 1,600 salespeople in their 2,500 member workforce. Perhaps Groupon sees self-service as an opportunity to expand their business and build revenue further without the need for as heavy a sales presence in every city. This self-service opportunity becomes greater as Groupon’s brand presence continues to grow.

Oddly the idea of Groupon offering a self-service option differs from Mason’s presentation in which he talked about the need for a strong sales team to make sure all of the deals are of top quality. I assume there will be a strong quality control mechanism for self-promoted deals. Maybe they will add Digg-like voting to push deals to the frontpage of a city.

Yesterday Brian Mayer at MV Technology Partners noticed something new on the Groupon Chicago (their homebase) market. In the graphic below, you can see that Groupon mentions a new service named, “Groupon Stores” which appears to be a self-service option for merchants to participate within the Groupon platform.

I couldn’t find a mention of Groupon Stores within the merchants section of the site so I am not sure what the fees and/or charges are for merchants who use this new offering.

Brian notes, “The potential of this new program is obvious: the new merchant program will allow stores to create their own Groupon deals, which would presumably be purchased through the Groupon system, growing the network and enabling more targeted, localized deals.”

So far, the current Groupon Stores deal I’ve displayed below only has 6 sales. I wonder if the next city they will launch Groupon Stores will be in Mobile, their newest city.

Group buying service Groupon is certainly expanding at a rapid pace. Back in January, Groupon launched their 30th city, Cleveland, Ohio. Today they have announced more city launches, pushing their total markets to over 250. The new cities added to the Groupon lineup are: Fairfield County, Connecticut; Savannah, Georgia and Greenville, South Carolina.

At the Startup School event last weekend, run by Y Combinator, Groupon CEO Andrew Mason provided a presentation that looked back at the original concept, The Point, that eventually morphed into Groupon.  During the presentation Mason noted that they have over 1,600 salespeople in the company. This number represents 75% of the total Groupon staff.

One of the interesting areas regarding Groupon that I’ve been thinking about recently is customer service. Let’s say you purchase an item at the Gap’s website. If you have an issue, you go to the Gap to report the issue and hopefully get help with the purchase. When you purchase a “deal” on Groupon for a coupon you can use at the Gap, you now have two avenues to seek help if there is an issue.

Here’s a perfect example of this scenario: over the past week Groupon offered a deal for movie tickets.  It appears from the 12+ page discussion on SlickDeals, that the Groupon deal noted that the movie tickets were good for tickets up through $14 in value. However many people are reporting that at least one of the vendors are limiting the ticket value to $10.  Customers are now creating customer service tickets with both Groupon and the movie ticketing company.

On the positive side, nearly all of the forum threads I’ve read related to Groupon deals note that the company is very responsive in dealing with any deal issues. This level of quick and positive customer service will be critical as Groupon looks to expand their base of markets and to keep customers loyal to their service. Deal hunters are more demanding and require more customer service than average consumers. I wouldn’t be surprised if the total number of customer service employees at Groupon rises to 35-40% of their sales staff.