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Posts Tagged ‘Groupon’

5 top ways to succeed with Daily Deals

Monday, May 20th, 2013

GrouponBased on polling more than 500 restaurant decision makers, including 152 who have participated in daily deal campaigns, and taking into consideration what prior research has shown, Groupon (NASDAQ: GRPN) and the National Restaurant Association are providing restaurateurs with some of the top tactics for success with daily deal marketing campaigns.

While these tactics are specific to restaurants, we think almost any retailer can gain insight into what makes daily deals work from them.

Here’s an infographic illustrating the findings:

Research shows that best practices for restaurateurs to help ensure daily deal success include:

  • Prepare staff to focus on customer service, look for upsell opportunities and track offer redemption
  • Schedule daily deal timing based on business needs and seasonality
  • Estimate and understand the promotion’s impact on profitability
  • Measure success by using free tools provided by daily deal company
  • Encourage repeat visitors with a customer loyalty program

Results from the recent online survey conducted by Ipsos MediaCT showed restaurateurs who had successful daily deal experiences stood out as experimental marketers that use a variety of different channels and tactics to drive customer acquisition and retention:

  • 94 percent engage with customers via social media (vs. 75 percent of non-daily deal users)
  • 77 percent have run more than one daily deal
  • 73 percent connect with customers via email (vs. 59 percent of non-daily deal users)
  • 79 percent monitor online review sites to see what others are saying about their business (vs. 68 percent of non-daily deal users)
  • 71 percent have promoted their business with traditional newspaper and magazine ads (vs. 58 percent of non-daily deal users)

“Daily deals remain a very popular form of marketing for our members, and these are some important steps restaurateurs can take to help ensure a greater return on their investment,” said Julia Kanouse, VP, Strategic Marketing, National Restaurant Association.

“This study reveals how daily deals and the analytical tools that Groupon provides have become a powerful and measurable part of an active restaurateur’s marketing mix,” said Sanjay Gupta, VP, Merchant Marketing, Groupon.

Groupon and the National Restaurant Association have an ongoing partnership to provide restaurateurs with educational content and important marketing resources to help their businesses grow. This content will reside on www.grouponworks.com andhttp://www.restaurant.org.

How should merchants chose a daily deal site partner?

Wednesday, June 20th, 2012

By Allan Maurer

BloomspotChicago-based Groupon, (Nasdaq:GRPN) the daily deal site, got a share price boost Monday after Morgan Stanley upgraded the stock, which is still trading far from its initial public offering price of $20.

Morgan Stanley said Groupon’s 33 percent first-quarter rise in North American revenue came from better user-targeting. Such personalization could help avoid “deal fatigue and boost margins, it said.

Some analysts also cited Groupon’s better repeat merchant rate of 41 percent as a major plus factor.

Bloomspot says look at customer repeat rate

But San Francisco-based Bloomspot, yet another player in the crowded digital deals space that focuses on connecting high end merchants with targeted customers, suggests that’s not the metric that should interest merchants when they choose daily deal partners.

Instead, the firm suggests that customer repeat rates (how many times a customer returns to a merchant after redeeming an offer) – and spending numbers (how much a customer spends above the ticket price of the initial offer) are the important figures.

Huge repeat business numbers

Today, Bloomspot released internal data showing that 72 percent of its customers return to a business after redeeming their offers and the average overspend was $140.

Across verticals, customers spend beyond the price of the promotion.  For example, in the fine dining category, customers have spent more than three times above the original price of the certificate, or $150. Beauty and spa offers demonstrate an average of $174 in spend above the offer price.

Bloomspot also boasts a 54 percent merchant repeat rate, with 87 percent of merchants saying they will repeat.

Unusual business model

Bloomspot’s unusual business model takes credit card data at places where it runs an offer and uses it to predict how much a customer will spend on the offer, guaranteeing a certain level of profitability. If the offer misses the guarantee, Bloomspot makes up the difference from its own commission. That’s something of a no-lose deal for the merchant.

“As a company whose employees work on a commission basis, any special we run needs to attract the type of clientele who do not visit an establishment only when they have a massive coupon, but rather use coupons to explore the market and then return to those companies who best serve their needs,” said Brad Drummer, owner of Washington DC’s Nusta Spa.

“Lucky for us, Bloomspot put us in touch with just such a base of amazing customers that purchased many additional services at full price and scheduled their next visit on the spot. One of our customers bought a $70 deal and has been back 11 times. She’s spent almost $1,000 in-store since we ran! I’m glad we chose Bloomspot to represent our brand.”

Bloomspot has raised about $51 million in venture backing, not quite in the same league as Groupon and Living Social, but entirely respectable.

Many daily deal sites bit the dust

For a while it seemed as if a new daily deal site popped up every week, many in niche markets. But smaller players drop out almost as fast as they are created. At the beginning of 2012, Daily Deal Media said that 798 daily deal sites closed up shop in the last six months. The total number of sites globally fell 7.61 percent in that period.

We’ve seen conflicting reports regarding consumer acceptance of daily deals. In September last year, a study from researchers at Rice University and Cornell University showed that the companies are more popular than ever among consumers.

“The key finding is that there is no evidence of waning interest among consumers of daily deal promotions,” said Rice University’s Utpal Dholakia, co-author of “Daily Deal Fatigue or Unabated Enthusiasm?” “In fact, the more deals purchased by an individual, the more enthusiastic they seem to be.”

An infographic overview of the Facebook IPO and Mark Zuckerberg

Friday, May 25th, 2012

FacebookFacebook’s IPO fell with more of a whimper than a bang when it finally hit a troubled NASDAQ a  week ago. There’s a lot of discussion on the web about what went wrong. A quick Google search for that phrase turns up nine different stories on the firs page alone.

The folks over at Schools.com and Daily Infographic offer this overview of the Facebook IPO without second guessing it.

Facedbook IPO infographic

Which cities have the most social media savvy businesses?

Thursday, May 17th, 2012

FriscoTopping the list of most social small business cities in the U.S. on the just released Radius Social Small Business Report: San Francisco and Los Angeles, as West Coast cities overall ranked higher than their East Coast counterparts. New York ranked #7, while other major East Coast cities, such as Boston, and NC Research Triangle cities did not make the top 20.

Some of the other findings are surprising.

The results are the findings of the first annual Radius Social Small Business Report, which tracks SMBs in the top 85 U.S. cities and ranks them via the Radius Social Index, a score compromised of social media presence and daily deal activity.

Radius’s technology collects and monitors information from more than 15 million SMBs in the U.S. and can measure social media presence by the number of SMBs with company websites, social media profiles on Facebook and Twitter, check-ins on Foursquare and Yelp reviews.

It can also measure daily deal activity based on the number of SMBs that have issued a daily deal.

“This report shows how small business owners in large metropolitan areas are embracing social media,” said Darian Shirazi, Founder & CEO of Radius.

“With our data on small businesses, we can extract valuable insights that are not only a competitive advantage for SMBs and large enterprises, but also an economic asset for a variety of civic institutions.”

Radius’ innovative, cloud-based technology collects and monitors information from hundreds of thousands of sources via multiple channels including social, news and government sites. Radius provides the most accurate online and social data available on the SMB market.

The top 10 cities with the most socially savvy SMBs, based on the Radius Index:
City Radius Social Index Score (out of 10)
San Francisco, CA 8.84
Los Angeles, CA 7.61
Washington, DC 7.31
Seattle, WA 6.37
San Diego, CA 6.28
Chicago, IL 6.03
New York, NY 5.67
Dallas, TX 5.57
Phoenix, AZ 5.52
Tampa, FL 5.44

Other notable findings from the Social Small Business Report include:

  • Grand Rapids, MI (29%) and Oklahoma, OK (28%) have the highest percentage of SMBs with Facebook pages.
  • Metropolitan cities that serve as home to major daily deal companies such as Living Social (Washington, DC – .5%) and Groupon (Chicago, IL – .4%) have the highest percentage of SMBs that have done at least one daily deal. However, both cities are less than 1 percent.
  • Buffalo, NY (20%) and Rochester, MN (20%) have the highest percentage of SMBs with Foursquare check-ins.
  • Charleston, WV ranked last amongst the top 85 U.S. social small business cities with a score of 1.8.

 

New technologies leading states to tax firms for “economic presence”

Monday, May 7th, 2012

Bloomberg BNAStates once believed that a corporation needed a physical presence within their borders before it could be subject to an income-based tax or sales tax, but many are shifting to a standard based on “economic presence.”

Amazon and other online companies have fought highly public battles with states over these tax issues. A powerful “Main Street” lobbying effort has fought to get them on equal footing with brick & mortar stores in terms of collecting state sales taxes.

Technologies, such as cloud computing, and new transactions such as Groupon and LivingSocial, are challenging the parameters of most states’ tax codes, which either have not addressed how these technologies and transactions will be taxed, or do so under outdated provisions.

At issue is how states are applying the legal doctrine known as “nexus,” the level of contact that must exist between a taxpayer and a state before the state has the authority under the U.S. Constitution to assess a tax.

Shifting standards

An annual Bloomberg BNA survey of state tax departments released this month asks senior state tax officials in all 50 states how their jurisdictions are taxing the new technologies and types of transactions that continue to emerge as the U.S. economy shifts from the bricks and mortar of Main Street to the web-based world, which operates mostly independent of state or local borders.

It found that most states have shifted to a nexus standard based on “economic presence” within their borders, upon which an income tax can be imposed.

What constitutes a taxable “economic presence?”

The Bloomberg BNA 2012 State Tax Department Survey identifies a number of different scenarios that can trigger income tax nexus in different states:

  • Sixteen states said having a website on a server physically located within their jurisdiction will trigger income tax nexus.
  • Having a substantial number of customers with billing addresses in the state? Fourteen states said yes. That would trigger nexus for the firm.
  • Thirteen states would apply sales and use tax to fees paid by in-state customers to remotely access canned or prewritten software that is hosted on a web server.
  • Nearly every state agreed that social media coupon companies, such as Groupon or LivingSocial, are not liable for taxes when their coupons are redeemed at in-state retailers or restaurants. But the states were very much divided on the question of whether sales taxes, paid by the end user, should be assessed on the full or the discounted price of the product or service.
  • All but six jurisdictions tax an out-of-state employer that permits an employee to telecommute from a home within their borders.
  • Twenty-three states said nexus would arise for reimbursing sales staff for the costs of maintaining an in-home office.
  • Job fairs or other recruitment activities would trigger income tax nexus in 21 states.
  • Thirty-six states said nexus would arise from having employees hire, supervise, or train other employees within their borders.

New online tools help hotels, but daily deal sites may not be best

Wednesday, April 4th, 2012

TravelClickDespite the immense popularity and relative newness of flash sale websites such as Groupon, BloomSpot, JetSetter and Living Social, the jury is still out on the effectiveness and real value of these sites for a hotel’s marketing plan.

According to a recent survey from TravelClick, a leading global provider of revenue generating solutions for hoteliers, 40 percent of the approximately 900 global hoteliers surveyed have used a flash sale website.  Of the 40 percent who have tried these sites, 38 percent have found it less successful than they had hoped and do not plan to use again.

Hoteliers believed that the sales gave up too much revenue to the site operator (25 percent), did not attract the right caliber of customer reflective of the brand (21.7 percent) and did not see enough return business from the promotion (21.7 percent).

Nearly 40 percent (36.9 percent) of those surveyed have not tried a flash sale promotion and have no interest in executing one in 2012, while 23 percent say that they will try a flash sale site for the first time this year.  When asked which flash sale website hotels chose to use, the majority (53.3 percent) of hoteliers polled had partnered with Groupon.

Flash sales have benefits & risks

“Flash sales can drive considerable demand during low occupancy periods; however, there are many benefits and risks to this approach that require hoteliers to first weigh all viable distribution options.

Compared to other channels, flash sales can provide a quick lift in room growth in a short time.

However, most flash sales carry a high distribution cost due to steep discount and commission requirements,” said John R. Hach, TravelClick’s senior vice president, Global Product Management.

“Hoteliers must remember that using the right tools, at the right time, and developing smart promotions will not only fill immediate occupancy needs but also enable them to build direct relationships with potential customers for the long term.”

TravelClick Best Practices for Filling Low Occupancy Periods:

  1. Global Distribution System Marketing (worldwide computer network)– GDS Advertising offers the unique ability to target prospective guests based on reservation trends specific to arrival date.
  2. Retargeting — Retargeting allows hoteliers to target potential customers, through online ads, who visited their website but did not book a room
  3. Opaque Online Travel Agencies — Running promotions on opaque OTAs enables hoteliers to move inventory at a deep discount but keep the brand intact because the name of the hotel is not made available until after the promotion is booked

Hach concluded, “The good news is that more and more online tactics are being developed to help hotels fill rooms during low occupancy periods.  However, it is imperative that hoteliers don’t get caught up in the hype and keep their eye on executing high-impact activities that achieve measureable results.”

IPOs heat up, M&A slows for venture backed firms

Monday, April 2nd, 2012

venturesourceThe public markets showed a strong appetite for U.S. venture capital companies in the first quarter but corporations did not as the pace of acquisitions slowed dramatically.

Twenty companies held initial public offerings (IPOs) during the first quarter making it the most active quarter for IPOs since the fourth quarter of 2007 and the most active first quarter since 2000.

Ninety-four companies were acquired for $18.1 billion during the same period, the second-straight quarter of declining deal volume for mergers and acquisitions (M&As), according to Dow Jones VentureSource.

“Greater stability in the public markets, more corporations opening venture units to work closely with startups without acquiring them, and a continued disconnect between entrepreneurs’ asking price and what corporations are willing to pay have contributed to a steady decline in M&A activity,” said Jessica Canning, global research director for Dow Jones VentureSource.

Small- and Mid-Cap IPOs Take Center Stage

Twenty companies raised $1.4 billion through public offerings in the first quarter, significantly more exits and capital than the 11 IPOs that raised $768 million during the first quarter of last year.

“Big exits by Groupon and Zynga dominated the end of 2011, but small- and mid-cap IPOs have taken center stage so far this year,” said Zoran Basich, editor of Dow Jones VentureWire. “The public markets proved receptive to a broad range of companies, which is a positive sign for the industry.”

Currently, 50 U.S. venture-backed companies are in IPO registration. Thirteen of those companies filed during the first quarter.

It took companies a median of $68 million and 7.7 years to reach an IPO. That represents a 22% drop in capital raised but an increase in time from 6.2 years during the same period a year ago.

Google, 2011′s Most Active Acquirer, Sits Out As Groupon Steps Up

Ninety-four mergers, acquisitions and buyouts raised $18.1 billion in the first quarter, a 32% decrease in deals and 42% increase in capital raised from the same period last year. The median price paid for a company spiked to $190 million from$43 million in the first quarter of last year.

Notably, Google, which was the most active acquirer of venture companies in 2011 with 12 acquisitions, did not buy any companies in the first quarter of 2012. Groupon, however, has been snapping up venture companies at a pace that rivals Google’s in 2011. Flush with cash after raising $700 million through its November IPO, Groupon acquired six venture companies in the first quarter, double the three acquisitions the company made throughout 2011.

To reach an M&A or buyout, companies raised a median of $13 million in venture financing, 13% less than in the first quarter of 2011, and took a median of 4.9 years to build their company, slightly more time than the 4.6-year median a year earlier.

Electronics top consumer shopping want lists, deal sites popular

Tuesday, February 28th, 2012

Shopping cartMore than 51 percent of consumers plan to spend the same amount of money in 2012 as in the previous year, according to a 2012 Shopping Outlook survey conducted by PriceGrabber, a part of Experian.

Other findings show that electronics tops many shopping lists and deal sites, particular for dining bargains, are popular.

While more than half of the survey respondents plan to spend the same amount of money as they did last year, 21 percent indicated they plan to spend more, and 28 percent plan to spend less.

Conducted from Jan. 26 to Feb. 13, 2012, the survey includes responses from 933 U.S. online shopping consumers.

Better discounts, confidence in the economy are reasons to spend this year
When those who plan to spend more were asked to select all of the reasons why, 36 percent cited confidence in the economy, and another 36 percent said that they expect retailers to offer better discounts this year.

Thirty percent indicated that they are earning more money in 2012, 6 percent said that they are tired of being frugal, 5 percent cited a credit limit increase, and another 5 percent have found employment in the past year.

When the respondents who plan to spend less this year were asked to select all of the reasons why, 40 percent cited increases in prices such as gas, food and necessities; 34 percent said lack of confidence in the economy. Twenty-nine percent indicated they were making less money this year, and 16 percent said they overspent during the 2011 holiday season.

“Our data shows that shoppers plan to remain optimistically cautious with their spending again this year and expect retailers to continue to offer deals and incentives on products,” said Graham Jones, general manager of PriceGrabber.

“We expect retailers will continue to roll out a number of tactics, such as free shipping, larger discounts and online-only promotions to help win the consumer dollar this year, while implementing strategies that will span brick-and-mortar, online and mobile shopping platforms to entice consumers to shop.”

Electronics and clothing top shopping wish lists for 2012
When consumers were asked to select all of the items and activities on which they plan to spend more in 2012, more than half said consumer electronics and clothing, followed closely by travel and vacations, household supplies and dining out.

Twenty-nine percent said they will spend more on furniture, books or DVDs, followed by jewelry, toys, events, sporting goods and fitness memberships.

Daily deal sites increase in popularity; most will search for food and dining
The daily deal industry looks like it will remain strong in 2012. Forty-six percent of PriceGrabber survey respondents indicated that they plan to use daily deal sites, such as Groupon, Living Social or PriceGrabber’s local deals category, more often in 2012 than in 2011.

When consumers who plan to use these sites more frequently were asked to select all of the categories they will search the most, 53 percent said food and dining, 46 percent said shopping, 42 percent said entertainment and events, and 34 percent said family and kids.

Most consumers will combine online, brick-and-mortar and mobile shopping
When asked how they plan to shop in 2012, 45 percent of PriceGrabber survey respondents said they will combine online, brick-and-mortar and mobile shopping. Forty-two percent said they will shop mostly online, 12 percent will shop mostly in brick-and-mortar stores, and 1 percent will shop primarily from a mobile device.

According to the survey, the average shopper will make 53 percent of his or her overall purchases online, 42 percent from brick-and-mortar stores and 5 percent from a mobile phone.

 

Zuckerberg tops Page in Peakscore list of social firm CEOs

Wednesday, February 8th, 2012
Time Mark Zuckerberg

Mark Zuckerberg is going to be extremely rich after a Facebook IPO (not that he isn't now!)

Initial public offerings of stock by innovative social Internet firms are making a major impact on the markets, these days.

Below is round-up of CEOs who have all watched their companies grow from small start-ups to publicly traded juggernauts.  Each CEO is ranked based on their PeekScore, or digital footprint, from around the Web.

PeekScore is a rank from 1 to 10, assigned to every person. The higher someone’s score, the “more important” they are on the web. In calculating your PeekScore and updating it often,  PeekYou takes into account your known presence and activity on the Internet, including but not limited to; your blogging, participation in social networks, the number of your friends, followers, or readers, the amount of web content you create, and your prominence in the news

1 Mark Zuckerberg Facebook / 2012 10.00 / 10.00

2 Larry Page Google / 2004 9.50 / 10.00

3 Andrew Mason Groupon / 2011 8.25 / 10.00

4 Mark Pincus Zynga / 2011 8.19 / 10.00

5 Tim Westergren Pandora / 2011 7.96 / 10.00

6 Jeff Clarke Orbitz / 2007 7.85 / 10.00

7 Arkady Volozh Yandex / 2011 7.09 / 10.00

8 Chen Tianqiao Shanda Games/ 2009 7.03 / 10.00

9 Shi Yuzhu Giant Interactive / 2007 7.03 / 10

10 Jeff Weiner LinkedIn / 2011 7.02 / 10

Andreessen-Horowitz raises $1.5B third fund, backs Facebook, Pinterest

Tuesday, January 31st, 2012
Ben Horowitz

Ben Horowitz

Andreessen-Horowitz, which backed Groupon, Skype, Zynga and Facebook, has raised $1.5 billion for its third fund, bringing its total amount under management to $2.7 billion.

Facebook is widely expected to file for an intial offering of public stock this week – in what is likely to be the biggest IPO event of the entire year.

Ben Horowitz, co-founder and general partner of Andreessen-Horowitz said in a statement that, “We’re remaking the modern venture capital firm and entrepreneurs are responding to our unique approach.”

Horowitz also wrote about why the firm has raised $2.7 billion in two years in a blog post, where he clearly identifies that different approach.

“We set out to design a venture capital firm that would enable founders to run their own companies,” he explains. That meant the firm’s general partners had to “be an effective mentor for a founder striving to be a CEO. This is why so many of our General Partners are former founders or CEOs or both, and they are all highly focused on helping founders become outstanding CEOs.”

The firm also backs well-known startups Foursquare, Fab, AirBnB, and Pinterest, which has been rapidly growing its footprint and gaining increasing attention in recent months and weeks.

Nearly 800 daily deal sites bit the digital dust the last 6 months

Thursday, January 19th, 2012

GrouponIs this good news for LivingSocial and Groupon or bad? It seemed as if a new daily deal site popped up every week last year, but many bit the digital dust in the second half of last year.

Daily Deal Media says that 798 daily deal sites closed up shop in the last six months. The total number of sites globally fell 7.61 percent in that period.

While Europe and Latin America saw increased numbers of daily deal sites (235 in Europe, 324 in Latin America), Asia lost a whopping 1,348 such sites.

But a survey of companies that used daily deal sites last year found that 35 percent had profitable deal offers and only 16.5 percent were unhappy with their deals.

We’ve said right along that the daily deal site space is going to see attrition and consolidation with only a few larger players likely to survive. But attrition is obviously taking more of these me-too sites than acquisitions.

A consumer poll found that 39 percent of 60,000 surveyed had never signed up for a daily deal program, so there is room for growth.

What do you think? Is the daily deal business sustainable?

Bargain hunting last minute holiday shoppers turning to daily deal sites

Wednesday, December 14th, 2011

PricegrabberFollowing a blowout Black Friday/Cyber Monday shopping weekend, many consumers will continue to hit the stores through the final days leading up to Christmas, according to survey data from PriceGrabber, a part of Experian.

Results from PriceGrabber’s fourth winter holiday shopping survey reveal that 41 percent of consumers plan to shop between Dec. 21 and Dec. 24 for holiday gifts.

This data comes on the heels of a successfulThanksgiving weekend for retailers, during which PriceGrabber experienced a 15 percent increase in site traffic compared to 2010. Conducted from Nov. 17 to Nov. 30, 2011, the survey includes responses from 13,472 U.S. online shopping consumers.

Many last-minute shoppers are hunting for bargains
When those consumers who plan to shop at the last minute were asked to select all of the reasons why, 43 percent said that they believe the best discounts can be found during this time period.

Another 43 percent of consumers indicated that they are busy and unable to finish their shopping earlier, 26 percent admitted to procrastinating, 22 percent believe it is fun to do last-minute shopping, and 10 percent are waiting for a year-end work bonus to begin shopping.

“After observing the increase in activity and sales of the Black Friday and Cyber Monday shopping season this year, we expect to see a significant percentage of consumers seeking to prompt retailers to offer additional savings throughout December,” said Graham Jones, general manager of PriceGrabber.

“Savvy shoppers saw retailers rolling out discounts as early as the week before Thanksgiving this year, and they are staying on top of last-minute incentives that are certainly on the horizon in the coming weeks.”

Consumers will buy a combination of high- and low-price-point items
When asked what type of gifts they plan to purchase at the last minute, 53 percent said they intend to purchase both big- and small-ticket items, 31 percent will buy only small-ticket items (under $100); 10 percent will purchase all of the holidays gifts on their list, and 6 percent will buy only big-ticket items (over $100).

More men will delay holiday shopping until January
While most consumers plan to complete their holiday shopping before Dec. 25, PriceGrabber’s survey found that 9 percent will wait until January to purchase holiday gifts. Men and women differed in their plans, with 11 percent of men saying they will wait until January to buy gifts and only 8 percent of women planning to do so.

When those consumers who will delay their holiday shopping until January were asked to select all of the reasons why, 68 percent said that they believe sale prices are best in January, 27 percent plan to use gift money received during the holiday period, 24 percent simply prefer shopping in January, and 11 percent plan to wait for a year-end work bonus to make purchases.

Daily deal sites begin to make mark on last-minute shoppers
According to PriceGrabber’s survey, a notable percentage of shoppers are turning to daily deal sites for great last-minute prices, with 27 percent indicating that they plan to shop for last-minute gifts on sites such as Groupon and LivingSocial.

Those consumers who plan to use daily deal sites will do so largely in hopes of finding a bargain.

Fifty-eight percent of respondents indicated they are trying to save money on gifts and like the discounts available through daily deal sites; 22 percent enjoy the great holiday deals on local services in their area; 13 percent said they liked being able to share great deals with family and friends, especially during the holiday season; 4 percent prefer to give experiential gifts and believe local deal sites offer the best options; and 3 percent are intrigued by the hype around local deal sites.

 

LivingSocial closes $176M round; Siri’s future; xxx domain name rush, more

Thursday, December 8th, 2011

LivingSocialLivingSocial, the DC-based daily deal site that is the second largest player in the space after Groupon, has raised $176 million in new funding, according to a filing with the U.S. Securities and Exchange Commission.

JP Morgan, Lightspeed Ventures and Amazon.com participated in this round, which Venture Beat reports is the first tranche of a $400 million raise.

The company has raised a total of $808 million. It has spent about $353 million to acquire SocialMedia.com, TicketMonster and Urban Escapes.

It delayed a planned $1 billion initial public offering of stock earlier this year.

LivingSocial presented at TechMedia’s 2009 Southeast Venture Conference (SEVC). The next SEVC is coming up in Tysons Corner, Va, Feb. 29-March 1.

New xxx domain names selling fast

ICM Registry sold more than 55,000 xxx domain names in a matter of hours, with a total of 159,000 plus sold by noon yesterday.

Many of the domain names will not be adult sites, but rather were registered by non-adult firms to prevent adult sites from sullying their brands.

Amazon launches $6M fund for indie Kindle authors

Amazon has started a new fund called KDP select, with $500,000 available for December to encourage authors to publish works exclusive on the Kindle for 90 days.

Russ Grandinetti, vice president of Kindle Content said,“By choosing KDP Select, independent authors and publishers have an opportunity to make money in a whole new way and reach the growing audience of Amazon Prime members, for KDP Select authors, and we hope to add more such tools over time.”

After the 90 days, the books will then go to the Kindle Owners Lending Library, which allows users to check out books for free, although Amazon will pay authors a fee. The Kindle lending library has stirred up some controversy among authors’ groups and publishers, but that’s nothing new for Amazon.

All this comes on the heels of Amazon’s quite successful launch of its 7-inch tablet, the Kindle Fire, which reports say may already be second to the iPad in tablet sales. We wonder if that will continue to hold true as other inexpensive tablets hit the market, such as the new one announced by MIPPS Technology.

 

The year of daily deals firms: acquisitions, consolidations, dead (infographic)

Wednesday, December 7th, 2011

It has been quite a ride for companies in the daily deals space this year. For a look at just how volatile the space has been, 8 coupons created this infographic:

Click here for a larger version

Daily Deals infographic (small)

Tech IPOs diving through open window

Friday, November 18th, 2011

YelpGroupon managed a highly successful initial public offering of stock earlier this month that opened at a higher than planned share price which then soared 40 percent. Angie’s List, which went public Wednesday, saw its shares jump 25 percent Thurdsday.

Now Yelp, which provides user reviews of restaurants, shopping, nightlife and entertainment, has filed for a $100 million IPO.

The number of shares to be offered and the price range for the offering have not yet been determined. A portion of the shares will be issued and sold by Yelp, and a portion will be sold by certain stockholders of Yelp.

Tech firms still in the wings include Zynga, Facebook, with others likely to line-up if the IPO window stays open any appreciable length of time. IPO activity had dramatically dropped in the third quarter due to economic volatility caused by European debt problems and the slow U.S. economy.

What do you think, readers? Will this IPO window provide time for more tech companies to go public? Will that stimulate increased venture backing for new tech firms?

Here’s VentureBeat’s take on the tech IPO window.

Costs of going public include investing in top management & new technology

Monday, November 14th, 2011

Ernst & YoungDespite stock market volatility, tech firms, encouraged by successful initial public offerings by firms such as Groupon, are once again eyeing IPOs, but a new survey by Ernst & Young points out the costs of going public.

According tothe survey, a new U.S. listed public company can expect to spend, on average, an additional $2.5 million annually post IPO, excluding the one-time costs related to executing the IPO.

A large part of the true incremental costs to be a public company includes compensation to attract and retain top management and board members, which ultimately helps secure investors and benefits the company in the long term.

Moreover, 80% of all companies made new investments in IT or software applications in contemplation of going public. 60% of companies made investments in an equity software package.  25% of the companies surveyed acquired new enterprise resource planning (ERP) software prior to the IPO.

Ernst & Young LLP’s inaugural True Costs of IPOs Survey examined the experiences of 26 companies that went public in the U.S. between 2009 and 2011.

The survey group included companies of varying sizes, ranging from annual revenues below$100 million to over $4 billion, with the average and median annual company revenues of $517 million and $143 million, respectively.

Companies operated in a wide range of industries, including healthcare, real estate, biopharma, technology, industrial products, financial services, retail and manufacturing. The survey focused on four key areas: management, board, advisors and technology.

“With the U.S. IPO pipeline full and primed for companies to go public in the fourth quarter and beyond, it’s important for management to understand the true cost of not only being a public company, but also consider the value a good management team can provide especially in volatile markets,” said Jacqueline Kelley, Americas IPO Leader for Ernst & Young LLP’s Strategic Growth Markets practice.

“Never before has it been more imperative for public companies to demonstrate management credibility as they face higher scrutiny from both investors and regulators.”

Management: Every company that provided information about management compensation indicated that it had increased compensation in contemplation of going public, whether through salary, bonus or stock options.

Most compensation increases were extended to the CEO, CFO and others in the finance function. 23% of companies had an in-house investor relations executive, and 50% had in-house counsel. On average, companies spent an additional $1.5M annually on salaries to management and others as a new public company.

Board: 82 percent of companies had either added new members to their Boards of Directors or increased director compensation prior to their IPO. 68 percent added at least one new Board member, and almost of all these companies added two or more. A similar percentage (64%) provided additional compensation to existing Boards.

Advisors: One of the more significant costs associated with IPOs are fees paid to advisors.  Most companies retained at least 11 third-party advisors in connection with the IPO. All (100%) of companies surveyed retained investment bankers, attorneys, auditors and stock exchanges.

The majority of companies engaged a printer (96%), D&O insurance carrier (92%), stock transfer agent (84%), SOX 404 consultant (76%), compensation advisor (72%), investor relations firm (68%) and tax advisor (60%). Some companies also hired a road show consultant (40%), a compensation advisor to the board (28%) and an internal audit advisor (12%).

On average, the companies surveyed spent $13 million in one-time advisory costs associated with executing the IPO. Companies spent an additional $1 million annually on various recurring advisory costs as a new public company.


Groupon IPO raises $700M, largest Internet IPO since Google

Friday, November 4th, 2011

GrouponGroupon, (Nasdaq:GRPN) the Chicago-based daily deal site increased the size of its initial public offering of stock by 5 million to 35 million shares it sold at $20 each – above its initial $16 to $18 range, to raise $700 million in the largest IPO for an Internet company since Google in 2004.

Groupon’s shares soared 42 percent in mid-day trading to $28.45 at around noon. That price puts its market value at $17.8 billion.

Reuter’s reports that the company’s low “float” helped boost demand for its shares. It is selling just 4.7 percent of its shares, one of the lowest percentages of IPO shares offered in ten years.

The IPO is among the most anticipated of recent years.

Groupon is the leader in the daily deal business, which has spawned a host of imitators and competitors, including DC-based LivingSocial and many regional firms.

See also:

Groupon taps Silicon Valley Bankers to defy expectations

 

 

 

 

 

 

 

 

Groupon plans to raise up to $540M in IPO, CouponCabin nabs $54M, BuyWithMe layoffs

Friday, October 21st, 2011

GrouponChicago-based Groupon, the leader in the online daily deal space, says in regulatory documents filed with the U.S. Securities and Exchange Commission that it plans to raise up to $540 million in an initial public offering of stock, less than the $750 million it said it planned to raise in a June filing.

Groupon said it plans to sell 30 million shares at between $16 and $18 a share, which would raise from $480 million to $540 million.

Groupon, which reported 143 million subscribers in Q3, up from 116 million in the previous quarter, had 30 million customers at the end of September – meaning subscribers who bought at least one Groupon deal.  Repeat customers rose to 16 million, up from 12 million.

It also saw increased revenue, netting $430 million, up 10 percent from the previous quarter.

Nevertheless, it is still losing money, although at a decreasing rate. The filing said it lost only $21 million in Q3, compared wiht $52 million in Q2.

PEHub has the numbers.

CouponCabin nabs $54M financing

In other online deal news, CouponCabin raised a fat $54 million in a round led by JMI Equity. The Whitling, IN-based firm, founded in 2003, verifies whether its coupons work and if they don’t offers users a $25 gift card.

CouponCabin founder and CEO Scott Kluth said, “Among other initiatives, this investment will enable us to grow our local, grocery and printable coupon offerings, making us the deepest and broadest consumer destination for coupons on the web. This investment will also help us better engage with more than one million fans on Facebook.”

The company has offered more than 100,000 deals from 3, 500 stores.

BuyWithMe layoffs due to shrinking markets

BuyWithMe, the third larges daily deals site online, slashed more than half its staff Thursday, a move COO David Wolfe told VentureBeat is due to the increasingly hostile capital market for daily deal sites. The company failed in its attempt to raise new money at a valuation of $500 million.

 

New survey says consumers love deals, advertisers benefit

Tuesday, October 11th, 2011

Borrell AssociatesIf you think there’s trouble in Dealville, think again. A survey by Borrell Associates and Presslaff Interactive of nearly 40,000 consumers indicates they not only love the deals, but they’re also eager to sign up for more.

And a simultaneous survey of more than 700 local advertisers shows that deals are driving a significant amount of new business as well as repeat business from those new customers.

“The buzz lately about ‘deals’ being burned out appears to be a bit off base,” said Gordon Borrell, CEO of Borrell Associates, which conducted the survey in August and September with Presslaff Interactive.

“The headlines about these programs putting advertisers at risk might just be a reflection of some businesses being unprepared or making bad deals. The survey indicates that a significant percentage of advertisers are seeing business they ordinarily don’t get, and that there’s a lot of growth potential.”

Consumer love deals

The survey offers insights into what consumers and advertisers are thinking about this explosive marketing phenomenon. While the research shows that consumers overwhelmingly love deals, the response from advertisers is more tempered. “Advertisers want more than they’re getting with ‘deals,’“ said Ruth Presslaff, president of Presslaff Interactive.

The survey was launched through local media companies across the U.S., polling consumers who frequented local media websites and small and medium-sized businesses (SMBs) who advertise or participate in deals and coupons programs. It ran Aug. 1 through Sept. 9 and polled 39,040 consumers and 729 advertisers.

Among the findings:

•    91% of the consumers said they’re likely to register for other deals programs.
•    44% have signed up for four or more email lists.
•    81% of advertiser respondents have not yet participated in a deals program
•    Of those advertisers who have, the average deal generated 191 sales
•     45% of the sales generated from deals come from new customers, and 22% of them become repeat customers.

“That last bullet point need underscoring,” Presslaff said. “If the average deal means 191 redemptions, that means each deal brings 20 new customers to a business. If one customer means $500 in annual sales to a dress shop or restaurant, that’s $10,000 in brand-new business for every deal launched. When advertisers figure this out, you may see a lot of bandwagon-chasing among that other 81% who haven’t tried out deals yet.”

The survey also asked questions about the frequency with which consumers preferred to see deals (answer: weekly, not daily), the most popular deals and coupons programs used, the types of business establishments most likely to participate in such programs, and the reasons advertisers and consumers participate.

To join the webinar or see full findings, see: http://www.borrellassociates.com/

For other perspectives on deal sites see:

Deal sites affect buying decisions

Deal sites growing in popularity, untapped opportunities

What the deal with daily deals? (infographic)

What do Tumblr, Hulu, Dropbox, and Groupon have in common?

Monday, October 10th, 2011

By Allan Maurer

 

Zack Urlocker, COO, Zendesk

Zack Urlocker, COO, Zendesk

When Groupon signed up with San Francisco-based Zendesk, which sells a web-based help desk service, it employed only 10 people. Today, the company still uses Zendesk and has 2,000 people using it now in a dozen different countries. Groupon is only one of the high profile online clients using Zendesk.

Others include Hulu.com, the blogging service Tumblr, and the file sharing service, Dropbox. Clients also include Sony Music, Open Table, Sears, and Adobe.

The company was founded in Copenhagen by three software industry veterans in 2007. The 120 employee company has global offices and boasts 4X growth from 2009 to 2010.

The venture-backed company raised capital from Charles River Capital, Matrix, and Benchmark Capital.

Zendesk COO Zack Urlocker tells us the cloud-based service, which costs from $9.99 a month for a starter program up to $99 per agent for the Enterprise version (with annual discounts available), solves a number of help desk problems for its clients.

“We’ve all had that help desk experience where they tell you that’s a different team and you have to tell your story all over again.” Can you think of a few times that’s happened to you? I certainly can.

Zendesk eliminates that problem by making sure each successive agent all of the caller’s information.

It also lets agents handle service requests through multiple channels, such as email or a portal (such as Tumblr’s). It has voice capabilities for online service chat.

It tracks a fair amount of data and includes 20 built-in reports and dashboards that provide analytics. Those include the ability to see when queries are coming in – hours, days, months.

Like many types of software once only available to Enterprise sized businesses due to their cost, making Zendesk available in the cloud is what makes it more affordable to businesses of all sizes.

“Customer experience software used to be expensive,” admits Urlocker. “It required six months to implement and cost half a million. We’ve made this affordable to smaller companies. Some of those might grow into a Groupon or an Open Table, but everyone should be able to get good service.”

 

 

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