Social media users were overwhelmingly positive about deal websites over the last 12 months, but their passion for online deals is rapidly cooling thanks to growing hatred for Groupon, according to a new social media analytics report from Amplicate.
The report found that 86% of comments posted on social media about deal websites were positive over the last 12 months. But social media users were much less positive in the second half of the year than in the first.
According to the report, 93% of comments on deal websites were positive in the first six months, compared with 81% in the last six months.
Swagbucks was the most loved deal website on social media over the 12 months. Fans of Swagbucks had almost nothing negative to say about the online loyalty program, with 99% of comments expressing love for the rewards site.
Groupon most talked about and most hated
Groupon, on the other hand, was far and away the most talked about and most hated deal website. Its popularity on social media declined dramatically in 2011 thanks to negative press for its controversial Superbowl commercials and growing skepticism about its business model.
However, thanks to a flurry of positive press in 2010, Groupon still managed to garner many more positive comments than negative over the 12 months, with 81% of opinions on social media expressing love for the daily deals giant.
Amplicate’s new report ‘Public Opinion on Deal Websites on Social Media‘ reveals that what social media users most liked about deal websites were the great deals and low prices for goods and services. The only common complaint against deal websites was about the food purchased through daily deals.
Amplicate Reports explain what people have been saying about a topic, when and where they’re saying it and why.
Despite recent news reports questioning the long-term viability of daily deal companies, a new study from researchers at Rice University and Cornell University shows 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.”
That’s really good news for Groupon which will likely go ahead and launch its initial public offering of stock in late October or early November, according to the New York Times. The company had delayed its IPO plans due to volatile market conditions for the IPO, which could value the company as high as $30 billion.
Dholakia, professor of management at Rice University’s Jones Graduate School of Business, and Sheryl Kimes, professor of hospitality management at Cornell University, examined consumer perceptions of promotions for nine daily deal companies: Groupon, LivingSocial, Travelzoo, Gilt City, OpenTable, BuyWithMe, ScoutMob, eversave and Restaurants.com. The researchers surveyed 973 respondents in August; 655 were daily deal users and 318 were not.
Good news for daily deal companies
Dholakia said the study is good news for daily deal companies, who have been hit hard in recent weeks with reports of the industry’s decline. Even previous research by Dholakia found that not enough businesses are coming back to daily deals to make the industry sustainable over a long time.
The new study shows significant opportunity for growth among consumers, as only 16.7 percent of the research panel’s population has used daily deals before, and the majority of non-users (90.6 percent) haven’t bought a deal because of awareness or access issues.
“We see significant further opportunity for trial and use of daily deals by current non-users,” Dholakia said.
Overall, daily deal customers tend to have little interest in being seen as different or “fringe” in their shopping patterns, are not very careful with their personal finances and do not think about spending issues all the time. They are interested in trying new products and services to have new experiences to talk about and influence others. They are attracted to a deal because it is a deal, and are likely to be less sensitive to the actual terms of the offer made by the merchant.
“All of these psychological characteristics indicate that the underlying motivations for purchasing daily deals are complex and multifaceted, having to do with more than just saving money,” Dholakia said.
The study brings into question one of the basic beliefs held by most in the daily deal industry. “There is a theory that consumers must be offered ‘deep’ discounts (50 percent or more) to be interested in daily deals,” Dholakia said.
“Our research shows that a significant number of consumers will continue to buy the deals even if the discounts are slightly smaller. This is a significant finding because my previous research showed that businesses find huge discounts to be unsustainable. The industry seems to be operating under the opinion that deep discounts are the only way to be successful, but that’s not the case.”
The study was funded by the Cornell Center for Hospitality Research and Rice University.
Charlie Sheen's Twitter meltdown is cited as one of the ten top social media events.
In advance of Social Media Week, September 19th, event organizers released list of the “Top 10 Social Media Events that Shook the World.” These events, from the Arab Spring to Wikileaks to Charlie Sheen, were all fundamentally shaped by the use of social media, and in many cases would have never happened without social networks like Twitter, Facebook and YouTube.
Social Media Week was launched by Crowdcentric in 2009 as the world’s first truly global conference designed to help increase understanding of the complex and integrated role social media plays in society. Unlike other conferences, Social Media Week is free to anyone, and those unable to attend in person can participate online to in many of the more than 450 events around the world.
Top 10 Social Media Events that Shook the World(In no particular order of impact)
1. Arab Spring and the uprisings in the Middle East
The “Arab Spring” uprisings in Tunisia, Egypt, and Libya, have proven that social media can transform society and politics on a global scale. Throughout the past several months, social media has been used to organize protests, highlight injustices and government crackdowns, and sway public opinion. Whether democracy will flourish remains to be seen, but social media’s impact in the movement so far is indisputable.
2. Japanese earthquake and tsunami
Millions of people from around the world watched the aftermath of a 8.9-magnitude earthquake in Japan in real-time via social media. Tweets and videos from Japan were posted within minutes, and viewers across the globe witnessed what would have been impossible to document before the widespread use of social media and handheld devices.
3. Wikileaks scandal
Is Julian Assange a champion of transparency in democracy and freedom of speech? Or is he just a criminal? Wikileaks continues to spur controversy, but the fact is Wikileaks would not have been possible without the rapid advances in digital and social media.
4. Charlie Sheen’s meltdown/use of Twitter
Charlie Sheen’s public meltdown spawned the hashtag “#winning,” which quickly became America’s favorite new catch phrase. Sheen subsequently amassed one million Twitter followers, faster than anyone else in history, and proved that our cultural obsession with celebrity is only growing now that we have more ways to interact online.
5. Anthony Weiner Twitter scandal
This was America’s first political scandal that unfolded – and then broke — over social media, putting a spotlight on the way social media tools are utilized both publicly and privately and will undoubtedly impact the way politicians communicate with their constituents and the public for years to come.
6. Rebecca Black’s viral YouTube hit and subsequent backlash
How is celebrity defined in the age of social media? Does Black’s music video “Friday,” which racked up hundreds of millions of views on YouTube earlier this year, count as a ‘hit’? The answers are up for debate, but it’s a fact that the traditional business models used by the entertainment and music industries are being upended by advances in new technology. (see video at bottom).
7. Social media coverage of British royal wedding
The royal wedding stole the social media show with upwards of nearly one million related Tweets in the month leading up to the nuptials. In the days leading up to the wedding, this single event accounted for more than 70% of all social media mentions.
8. UK Riots
After three nights of rioting in London, politicians blamed the violence on text and instant messaging on mobile devices. British police broke into smart phones to thwart planned attacks on local establishments, and even considered blocking access to social networking sites altogether
9. Hurricane Irene
Storm chasers didn’t need to leave their home to follow the path of Hurricane Irene, as it made its way up the East Coast in August, conjuring tweets on par with the traffic after the Japan earthquake.
10. Social Media IPO’s
Successful startups like Pandora and LinkedIn have gone public and there is growing speculation Groupon, Xanga and Facebook will soon follow suit
“2011 has been a profoundly important year as platforms and technologies have become so ubiquitous that the conversation has shifted from what they are, to how they are being used,” said Toby Daniels, founder and executive director of Social Media Week.
“Globally, the use and application of social media is changing lives, disrupting business, reshaping governments and redefining popular culture, and it’s our responsibility as a global platform to advance people’s understanding by capturing emerging trends and insights.”
New York-based Tremor Video, the largest independent online video technology company, has successfully raised a $37 million round of financing. New York City-based W Capital Partners led the round, which also includes the participation from Keating Capital, Canaan Partners, Draper Fisher Jurvetson Growth, General Catalyst Partners, Meritech Capital Partners, Singapore’s EDBI, Time Warner and SAP Ventures.
Having acquired ScanScout and Transpera in the past year, Tremor Video has extended its market leadership in the interactive video space and reaches more consumers than any other online video advertising company (according to comScore).
“We invest in companies that are leaders in rapidly growing markets, and this is no exception,” said Bob Migliorino, Managing Director of W Capital Partners. “Tremor Video’s performance in the fastest growing segment in online media, combined with Video Hub’s game-changing technology, makes us extremely happy to be working with them.”
Monitor realtime key factors
With the launch of Video Hub in May of this year, Tremor Video has radically changed the network model by enabling brand advertisers and their agencies to monitor in real time the key factors that are driving their campaign performance. VideoHub analyzes numerous video signals and determines which factors are the most important in delivering campaign success, with particular emphasis on the criteria that drive engagement and brand lift.
Based on Tremor Video’s SE2 technology, Video Hub provides marketers with insight into which environments enhance their brands, what provokes viewer engagement, and why a campaign is successful. Tremor Video plans to continue investing in the continued development and market adoption of Video Hub. It will also use these funds to explore additional acquisitions and expand into fast growing markets internationally.
Apsalar nabs $5M for mobile analytics & behaviorial targeting
San Francisco-based Apsalar, a mobile analytics and behavioral targeting platform for iOS and Android apps, today announced it has closed a $5 million round of funding led by Thomvest Ventures. Apsalar plans to use the new funding to grow the development team, expand its product portfolio and ramp up sales and marketing efforts.
The funding includes participation by Thomvest Ventures, Battery Ventures, DN Capital and existing investors. The new round of funding comes on the heels of Apsalar’s $800,000 seed funding in late 2010 from 500 Startups, Mark Goines, Morado Venture Partners, Founder’s Co-op and Seraph Group. Don Butler, managing director at Thomvest Ventures joins Apsalar’s board of directors.
Apsalar’s comprehensive mobile analytics and behavioral targeting platform gives developers and publishers the tools to understand how their apps are used and to identify and deliver personalized content and offers to their most valuable users.
GoSteals offers free daily deals marketplace for businesses
Launching this week at DEMO Fall 2011, GoSteals is a 100% free platform for every business and consumer worldwide to make daily deals. Built on top of the world’s largest mission-critical web services platform from Mediaspectrum, GoSteals is a self-service business model for the daily deal marketplace.
GoSteals empowers small businesses with a fully automated, self-service portal for managing the entire daily deal lifecycle. Within five minutes, merchants can log-on and structure their deals to advertise. That’s five minutes, to gain free exposure and new customers while keeping all the revenue generated in the process.
Merchants create and schedule their deal, maintaining complete and instant control throughout the entire deal life cycle. GoSteals provides them with real-time information on how many customers have reserved the deal. It even automates customer tracking by providing a unique 2-D bar code on every deal voucher
It’s not just local businesses that benefit. GoSteals is free for consumers as well. They can reserve — or “steal” — any deal they want at no cost. No upfront payment is required. They pay only when they actually cash it in at the participating business. If they don’t use it, they lose nothing. There is no risk involved, only the opportunity for extreme savings.
One of the primary drawbacks of daily deals for businesses is that the daily deal firms take significant cuts of every transaction on top of whatever usually significant discount is offered. Some researchers have questioned the sustainability of the daily deals model.
GoSteals launches this week in 15 core markets globally, with plans for universal reach within 60 days.
It seems as if a new daily deal site pops up just about as often as their persistent emails pop into our email boxes. While the major players such as Chicago-based Groupon and DC’s LivingSocial have raised more than a billion in venture backing, literally hundreds of smaller regional and niche firms are also fighting for portions of the daily deal meal.
Lab42 asked 500 daily deal users which sites they use much, how often they look, and how much money they spend to produce this “What’s The Deal” infographic:
Investors are giving Twitter something to tweet about: the microblogging service is in the process of raising an additional $400 million in backing – the second raise of that amount this year at a valuation of about $8 billion, according to reports. CNN Money first reported the story about the new raise.
The company, which claims more than 300 million users, more than 100 million of them active, raised $400 million earlier in the summer in a round led by Yuri Milkner and Russia-based DST, the same firm that has backed Facebook, Zynga, and Groupon.
It seems like everyone these days uses coupon sites like Groupon for everything from dining to vacations to laser hair removal. These sites can be an interesting new way to get the word out about one’s business to thousands of people. For business owners looking to promote their company or product, the growing number of locally-oriented coupon sites can be daunting.
Small business owners considering using coupon sites to promote their business might want to check out the Business Finance Store’s blog post “Coupon Sites: Deal or No Deal?.”
The Business Finance Store raises a few issues to consider when choosing a coupon site to promote one’s business. While it may seem easy to advertise a coupon on a website, knowing a few things issues before getting started will be immensely helpful to small business owners.
Coupon sites have the potential to improve a company’s business. However, success with coupons and deals requires finesse and good communication. Read about a few things business should think about before using coupon sites at the Business Finance Store’s blog.
The Business Finance Store is a business financing and consulting firm that offers customized Business Financial Solutions. Seasoned professionals offer assistance in a variety of financial solutions to help small businesses succeed such as: Business Financial Solutions , Legal Solutions, and Accounting Solutions.
For 10 years The Business Finance Store has been helping startups and other small businesses legally structure their companies, find the right franchises, get the funding they need, and to achieve the American Dream of owning their own successful business. Since expanding nationwide in 2007 they have helped thousands of companies and have funded over $60 Million in business credit lines, not including SBA loans.
CHICAGO – Is there a tech boom or are we in another tech bubble? That’s the question that pops up in the face of extremely high valuations for digital media companies, particularly on the West Coast, and whenever a no-profits company such as Linkedin or Pandora launches an IPO. Sean Harper, CEO of Chicago-based FeeFighters.com, a firm that is like a LendingTree for small businesses looking for services such as credit card processing, says he doesn’t think were in another tech bubble.
“The biggest valuations are similar to those in the bubble era,” he tells the TechJournal, but, he adds, “The companies now have way, way more traction. Companies such as Zynga and Groupon have lots of users and revenues. That’s our perspective,” he says, following the data FeeFighters collected to make the infographic below. “Others could look at the same data and come to the opposite conclusion,” he says.
FeeFighters, a seven employee firm founded in 2009, has raised $1.5 million in backing. It’s provides a shopping platform to help small businesses get better deals on credit card processing, insurance and other financial services. What do you think? Are we in a tech boom or headed for a tech bust? Here’s the inforgraphic:
Over the past six months, daily deal sites such as Groupon, Living Social and Gilt Groupe have attracted more than $1.69 billion in venture capital and other investments according to the new 2011 Daily Deal Investment Index released today by Daily Deal Media. Overall, 22 Daily Deal companies have received investments in the past six months.
“This market is exploding, with the number of daily deal companies growing from 70 to more than 350 in the past year,” said Boyan Josic, CEO of Daily Deal Media, the leading publication covering the daily deal market.
“Despite a conservative approach from many investors, as daily deals companies build scale and expand reach, they are finding support from the investor community. We see no signs of the market slowing down as an increasing number of sites test the market, helped by low barriers to entry.”
The 10 largest investments of the past six months include:
Company
Funding Round
Date
Amount ($Millions)
Groupon
Series D
1/11
950.0
Living Social
Series E
4/11
400.0
Gilt Group
Series E
5/11
138.0
Angie’s List
Private Equity
3/11
53.6
Ideeli
Series C
4/11
41.0
DealFind
NA
5/11
31.0
Popsugar
N/A
4/11
15.0
Zozi
Series B
5/11
7.0
Plum District
Series A
1/11
8.5
Half Off Depot
Series A
5/11
6.8
Globally, there are more than 3,000 total daily deal companies, including more than 1,000 in China, more than 900 in Europe and more than 600 in South America.
For more information or to purchase a copy of the 1H 2011 Daily Deal Investment Index, which includes a comprehensive breakdown of the deals and profiles of more than 30 leading Daily Deal companies, visit dailydealmedia.com/data-and-reports.
Daily Deal Media is a news, information and data resource for those interested in the Daily Deal industry. Known for its breaking news and unbiased market insight, the company provides its readers with valuable insight, resources, industry reports, forums and conferences.
WASHINGTON, DC – LivingSocial, the DC-based main competitor to Chicago-based Groupon in the group local buying space, has selected banks to underwrite a initial public offering of stock to raise $1 billion, according to CNBC.
The company signed on with JP Morgan, Bank of Amercia, and Deutsche Bank, but has not yet filed papers with the U.S. Securities and Exchange Commission but reports say the company is likely to be valued at between $10 billion and $15 billion.
Competitor Groupon filed for an IPO to raise at least $750 million a month ago.
Yipit, a daily deal aggregator, estimates that LivingSocial captured 24 percent of the daily local deal revenue in top North American cities in May.
While the buzz around daily deal sites has been deafening, they have raised billions in venture backing, and new clones appear, well, daily, a Rice University professor says they may not have a sustainable business in the long run.
Daily deals appeal to consumers always on the lookout for a bargain, with 44 percent of those in PriceGrabber’s Local Deals Survey saying they use daily deal sites. But even more (52 percent) say they feel overwhelmed by the number of deals offered via email.
The survey includes responses from 2,088 U.S. online consumers and was conducted from May 20 to 25, 2011.
That’s not all the daily deal providers such as Groupon, LivingSocial and a host of niche and regional firms have to worry about, though. As we reported last week, a Rice University prof who studies the space thinks the daily deal business model may not be sustainable over the long run.
We also suspect consumers may tire of too many deals from the same sorts of businesses (spas, massage, restaurants) or the number that don’t attract enough people to pan out.
Most consumers, though, seem to really like the daily bargains, the PriceGrabber survey says.
Consumers subscribe to several local deal sites and are looking to streamline
U.S. shoppers can’t seem to get enough of the thrill of finding a good bargain — but in true American fashion, they still want a shortcut to the greatest deal. According to PriceGrabber, 63 percent of consumers receive emails from two or more local deal Websites a day. Still, fully 60 percent of respondents said they feel the daily deal industry is getting crowded with too many sites.
Of course, PriceGrabber did not do the survey for fun. It has a motive.
This emerging frustration felt by shoppers as the daily deal industry explodes is underscoring the market’s demand for a more streamlined process to shop for local bargains. On June 1, 2011, PriceGrabber launched a solution: its local deal category, a one-stop shop for consumers who want to browse thousands of deals from more than 20 local deal Websites.
It’s simple: Consumers use daily deal sites to save money
Consumers’ interest in deals of the day can be attributed to the simple fact that shoppers are always looking for new ways to save money. Survey results find that 78 percent of respondents said they purchase local deals because they like saving money. Only 19 percent listed the ability to try out new services that are normally out of their price range.
“Whether we are in the depths of a recession or the height of a booming economy, consumers are looking to save money — period,” commented Graham Jones, general manager of PriceGrabber.
“The daily deals sector clearly shows promising signs for long-term growth, but the data reinforces the frustration consumers can feel when a new trend explodes so quickly. With our local deal category, PriceGrabber saw the opportunity to fill a niche begging to be added to the daily deal marketplace by providing consumers with a more efficient way to sort through numerous offers.”
Shoppers indicate that they love to share deals
The power of social buying is infectious. According to PriceGrabber, 86 percent of respondents indicated that when they find a great deal, they share the information with friends and family. When asked to select all of the ways in which they would share this information, 71 percent said word of mouth; 64 percent chose email and 26 percent shared information through Facebook.
“Our data shows that shoppers truly believe a deal is only as good as the people with whom you enjoy it,” said Jones. “Part of the appeal that comes with local deals and group buying is very likely the fact that the discount can be experienced with others. A trend that allows for experiences to be shared will almost certainly have staying power. We are confident that PriceGrabber’s local deal category will save consumers money and time by offering them the most efficient way for sharing great deals with their friends and family.”
Apparently, nuclear reactors are not the only thing melting down in Japan. Japanese video game developer Sega says hackers have stolen data from 1.3 million of its customers.
The company says names, birth dates, e-mail addresses and encrypted passwords were among the data compromised, but payment information such as credit card numbers, were not taken. That’s probably only because the company uses a third-party processor for financial transactions, so it didn’t store that data itself.
Sega makes games such as “Sonci the Hedgehog. The data breach is just the latest of a series of major cyber attacks that have hit Sony’s Playstatio, Nintendo, and Citigroup, among others.
A Sega spokeswoman told Reuters, “We want to work on strengthening security.” Fine time to think about that. What is wrong with these high tech companies and their security arms? How many serious break-ins will it take before they harden their ramparts?
In one odd twist, the hacker group Lulz tweeted, “Sega – contact us. We want to help you destroy the hackers that attacked you….these people are going down.”
Google deal with British Library will make 250,000 texts available
Google has made a deal with the British Library to digitize and make available 250,000 out-of-copyright texts from 1700 to 1870.
Google has made similar deals with other libraries as it works toward its plan of digitizing as many books as possible. In the U.S., Google’s efforts to put copyrighted texts online in digital form as well met with opposition and a law suit.
Tech firm employees want to cash out
Many employees of tech and social networking firms such as Facebook are eager to sell their stock while valuations are still somewhere in the stratosphere, says a New York Times report.
Facebook has been driving the trend, says the Times. Its stock accounted for about 45 percent of all trades on SecondMarket, where private company shares are traded. About 100 of Facebook’s early employees, who are not restrained from selling shares the way employees who joined the company later are, have left the firm. Most, according to Times informants, left to start new companies.
That is one of the reasons major successes in tech are so important to the startup ecosystem. They pump up the entrepreneurial ecosystem with new blood and new cash.
The Times says that Chicago-based Groupon has seen the most investors and founders “take money off the table.” That includes the CEO, chair and others, who have already become rich from its almost billion in venture-backing, even though the company is still losing money. We recently reported that daily deal sites may face an uphill battle to establish sustainable businesses despite their faddish popularity right now.
Raleigh, NC-based Valencell, an innovator in mobile health and fitness technology, has received $5.5 million in Series B venture investment. The round was led by Best Buy Capital, the investment group of Best Buy Co., Inc., with participation from Series A investors TDF and True Ventures. Valencell was a presenting company at TechMedia’s Southeast Venture Conference in Atlanta in March.
Seeded by its three founders, Valencell previously raised a Series A round of $1 million and has been awarded more than $3 million in R&D grants.
Valencell created a technology it calls Healthset powered earbuds, which gives audio headsets the ability to monitor the health and fitness of the user.
Healthset sensor technology tracks real-time physiological metrics including heart rate, calories burned, steps taken, distance traveled, speed and more, while the consumer listens to music, talks over the phone, or goes about daily life activities. Data is streamed to smartphones and/or mp3-players through wired or wireless links, enabling live body metrics, training, and coaching via fitness applications on mobile devices and online.
“People everywhere are listening to music while running and exercising,“ explained CEO and cofounder Dr. Steven LeBoeuf. “Integrating heart rate sensors directly and seamlessly into music earbuds fits right into the behavior of consumers today. Everyone’s body responds differently to exercise, so being able to monitor the heart, the body’s engine, will help consumers customize and personalize workout regiments for their specific goals whether it’s for weight loss, toning or endurance. Users will be able to view their metrics live through fitness applications on their iPhone, Android phones, other mobile devices and online.”
Recent research from PricewaterhouseCoopers cites growing demand for mobile health monitoring: 88% of physicians said they would like their patients to track their health information and 40% of individuals said they would buy a personal health-monitoring device or pay for a subscription to send health information to their providers.
California-based social commerce firm BeachMint chews on $23.5M financing
BeachMint has secured a $23.5 million round of funding led by Scale Venture Partners and Lightbank, the technology investment fund started by Eric Lefkofsky and Brad Keywell, cofounders of Groupon.
Existing investors, New Enterprise Associates, Trinity Ventures, and Anthem Ventures also participated in the round. The new funding will be used to grow the existing brands, JewelMint and StyleMint (launching July 1), to accelerate the company’s phenomenal growth and to expand into new categories.
Sharon Wienbar, Scale Venture Partners’ managing director, will join the company’s Board. She said, . ”Consumer e-commerce is being transformed by social networking and curation,” said Wienbar. “BeachMint is redefining online shopping by taking advantage of these trends to deliver great consumer value. We are excited by the amazing traction BeachMint has achieved in a short time with JewelMint.”
BeachMint was founded by MySpace Co-Founder, Josh Berman, and serial tech entrepreneur, Diego Berdakin.
Evernote raising about $50M in new capital
TechCrunch reports that the popular notetaking service, Evernote, is raising about $50 million in venture funding in a round led by Sequoia Capital. It is already up to $40 million in the round. It previously raised $20.5 million. We use the free version of Evernote, which makes it easy to save text, images, and urls when you’re doing web research, and saves your data in the cloud, so it is available on any machine on which you install the software.
Daily Deals for Moms lands angel funding
Yet another niche play in the crowded daily deals space has grabbed initial angel funding.
Denver-based Daily Deals for Moms, a social couponing website for moms and families looking for and sharing great deals with a commitment to support small business and keep retail dollars in the community, says it has secured a round of angel funding. The group of investors includes Victor Lazzaro, Jr. of Denver based Volante Capital.
The company will keep the financing open to strategic investors, but intends to close the round within the next few weeks. The infusion of capital will fuel growth, further build infrastructure, and continue to drive awareness of the site as it expands into more cities.
Launched in 2010 by Mompreneurs Ashley E. Kingsley and Whitney Trujillo, Daily Deals for Moms primarily serves secondary markets such as Denver, Toledo, and Des Moines. It is specifically focused on daily deals for moms and families.
Some of these niche players in the daily deals and coupons sites may have a better chance of survival in the long run than the 800 pound gorillas if they create deals that benefit both the consumer and the business. If nothing else, they’re likely to be targets for the larger companies if they go public and have substantial reserves of cash to make acquisitions.
OwnerIQ closes on $7M for targeted advertising platform
OwnerIQ, the inventor of Ownership Targeted media and developer of one of the most advanced Real-Time media buying platforms in the industry, announced today it has closed a $7 million expansion round. All existing investors participated, and Longworth Venture Partners also joined this round.
Founded in 2006 in Boston, OwnerIQ operates a network of channel-focused websites to help consumers easily find and store must-have self-support product information. The company pioneered the concept of Ownership Targeting, providing brand advertisers with highly customized programs to precisely target consumers based on products they already own.
Pandora, (NYSE:P) the online radio service, saw its share prices tumble below its offering price of $16 in its second day of trading. The company’s shares were trading at $13.26 Thursday as the markets close.
Although the company’s shares rose as high as $26 following its initial public offering of stock Wednesday, they fell to $17.42 by the day’s close.
Following the smashing success of business social networking site LinkedIn’s IPO, Pandora’s debut on the NYSE was highly anticipated.
The company, however, has yet to make a profit, despite having 90 million users, and much media commentary about the Pandora IPO focused on the firm’s downsides. Those include a small advertiser base compared to its user base, the cost of its contracts with music labels (to which it pays a royalty every time a user plays a tune), and its losses despite increasing revenue.
Every time Pandora gains a customer, it has to pay more music royalties. Pandora also must renegotiate its contracts with the music labels in two years.
Pandora doubled its first quarter revenue in 2011 to $51 million, but also doubled its losses to $6.8 million compared to the same period last year.
LinkedIn (Linkd) , by comparison, is profitable and saw its first quarter revenue rise to $93.9 million, up 110 percent over the same period last year.
Groupon, the daily deal site that has raised a billion dollars in venture backing and filed to go public earlier this month, has also faced significant losses, chalking up a profit only in the first quarter of 2010. It lost $146.5 million in the first quarter this year.
A Rice University study says that daily deal sites are not developing a sustainable business. That could affect how Groupon’s IPO performs.
Not enough businesses are coming back to daily deals to make the industry sustainable in the long run, says Utpal Dholakia in his third and most exhaustive study on the daily deal industry. That can’t be good news for Chicago-based Groupon, which raised a billion in venture backing and has filed for an initial public offering of stock, or DC-based LivingSocial, which has raised hundreds of millions in VC investments.
Dholakia, associate professor of management at Rice University examined performance of daily deals run through five major sites in 23 U.S. markets, including a survey-based study of 324 businesses that conducted a daily deal promotion between August 2009 and March 2011.
“The major take-away from the study is that not enough businesses are coming back to daily deals to make the industry sustainable in the long run,” Dholakia says. “And our results from three studies and close to 500 businesses surveyed show that the deals are nowhere close to the rates of financial success for participating businesses that some companies claim to be having.”
Some key findings of the study include:
21.7 percent of deal buyers never redeem the vouchers they’ve already paid for.
55.5 percent of businesses reported making money, 26.6 percent lost money and 17.9 percent broke even on their promotions.
Although close to 80 percent of deal users were new customers, significantly fewer users spent beyond the deal’s value or returned to purchase at full price.
48.1 percent of businesses indicated they would run another daily deal promotion, 19.8 percent said they would not and 32.1 percent said they were uncertain.
Study uncovers industry red flags
“Our findings also uncovered a number of red flags regarding the industry as a whole,” Dholakia says. “The relatively low percentages of deal users spending beyond the deal value (35.9 percent) and returning for a full-price purchase (19.9 percent) are symptomatic of a structural weakness in the daily deal business model.”
The study also points out that 72.8 percent of businesses indicated openness to considering a different daily deal site, and only 35.9 percent of restaurants/bars and 41.5 percent of salons and spas that had run a daily deal said they would run another such promotion in the future.
On average, close to 80 percent of deal users were new customers of a business and spent $64.30. To increase the likelihood of a profitable promotion, businesses should consider offering a daily deal of relatively high face value ($50 or more) with a shallow discount (at most 25 percent off face value), a short redemption period (three months or less), and a limit on the number of deal vouchers that consumers can buy.
Among industries, health, services and special events are the most successful at using daily deals: more than 70 percent of them made money on the promotion.
Less than half of restaurants earned a profit from daily deals promos
However, two of the largest industries—restaurants/bars and salons/spas—don’t perform as well. Only 43.6 percent of the restaurants surveyed earned a profit from the daily deal promotion, and just 35.9 percent of them intend to run another daily deal in the future. 53.7 percent of salons and spas made money on the promotion, but only 41.5 percent of them intend to run another daily deal in the future.
“Since restaurants, bars, salons and spas represent the bread-and-butter for many daily deal sites, these findings raise questions regarding the continued availability of a sufficient pool of viable revenue-generating merchants from these two industries for daily deal sites,” Dholakia says.
Daily deal spending has adversely affected all traditional marketing programs, Dholakia says.
Spending on Yellow Pages advertising was down 27.5 percent compared with 2009, print advertising was down 21.6 percent and self-managed direct mail was down 17.6 percent.
Local radio and TV advertising also dropped substantially, whereas spending on email promotions and online search programs was up substantially (7.8 percent in each case) over the past year.
“The businesses that we see spending their marketing dollars on daily deal sites have dramatically cut their advertising budgets,” Dholakia says. “This is a problem for businesses, because they’re not building their brand when they offer discounted prices for their products and services. Only about 20 percent of customers using daily deals return to businesses to buy at full price; customers acquired through other programs typically have much higher rates of full-price repurchases.”
There is still an upside for consumers and some business types to do daily deals, but Dholakia advises caution.
“For consumers, I’d say to be cautious about buying a daily deal. If you’re going to purchase a voucher, make sure you use it before it expires,” he says.
“Right now the getting is still good for the consumer, but that isn’t going to last much longer as these steep discounts won’t and can’t last very much longer.”
We wonder if this study will impact Groupon’s upcoming IPO or impede LivingSocial’s progress. In addition to those 800-pound gorillas of the daily deals space, there are hundreds of smaller firms doing similar things with various twists and in local markets. Is the whole daily deals phenomena just a passing fad? What do you think? Let us know in the comments.
Pandora Media Inc., the California-based Internet radio company, has set the terms for it planned initial public offering of stock. It will offer 13.68 million commons shares at between $7 and $9 a share, which would give it a market cap of about $1.4 billion at the high end of its range.
The company plans to trade on the NYSE exchange under the ticker symbol “P.”
Pandora is probably the best known of the Internet radio stations that allow users to create their own stations themed around music genres, bands, or performers and uses an algorithm to serve up other music users may also like.
Pandora raised about $56 million in venture backing from investors who include, according ot PE Hub: Crosslink Capital (22.92% pre-IPO stake), Walden Venture Capital (18.67%), Greylock Partners (14.06%), Labrador Ventures (8.46%), The Hearst Corp. (5.73%) and GGV Capital (5.15%). Reports say Hearst plans to sell approximately half its stake.
We use Pandora almost daily and have even paid to continue using it when we listen for more than 40 hours before a month ends. The site also allows users to buy tunes or albums they like and serves up ads as well. It also sells a premium, ad-free, no limit service with higher quality sound.
When we first started using the service and mentioned it to friends, most had not heard of it. Now, nearly everyone we know uses it from time to time.
We expect it’s IPO will make another big splash, assuming the economy as a whole hasn’t stalled due to continuing problems.
Chicago-based Groupon, the daily deal site, has also filed for an IPO, and other big Internet players such as Facebook, Twitter and Facebook game-maker Zynga are also expected to line up for IPOs within a year or so if not sooner.
CHICAGO – Groupon Inc., the Internet local deal firm that has raised $1.1 billion in venture backing, has filed to launch an initial public offering of stock, although the number of shares it will offer and their price will probably not be determined for several months.
The filing comes on the heels of LinkedIn’s IPO two weeks ago. LinkedIn shares doubled their price in first day trading and recalled memories of the dot com boom at the beginning of the century. It’s success was so dramatic it drew more talk about a new Internet bubble. Many analysts, however, point out that there are major differences between the Internet companies of the earlier era and this one.
Groupon lost $413 million in 2010 on revenue of $713 million, but is growing rapidly. It offers more than 1,000 daily deals to 83 million users in 43 countries. It employs 7,100 employees. The need to put people on the ground in market after market accounts for the cash burn of Groupon and other dialy deal firms such as LivingSocial.
In its filing with the U.S. Securities and Exchange Commission, Groupon said it plans to raise up to $750 million in its IPO, a number subject to change as investor interest solidifies.
We suspect that if Groupon is anywhere near as successful as LinkedIn with its IPO, it may do some serious acquistions. Hundreds of smaller local deal companies exist nationally, and some are doing well in their more limited markets.
Facebook, game-maker Zynga, and Twitter are all likely to launch IPOs over the next year or so. Facebook has said it probably won’t file until next April.
ATLANTA – Sionic Mobile Corp. has inched up to $1.97 million of a round now aimed at $2.5 million, down from the $5 million equity raise originally targeted, according to an amended filing with the U.S. Securities and Exchange Commission.
The company disclosed in a previous SEC filing that it had raised $1.4 million of the round in January 2010 when the round was aimed at $5 million.
Atlanta-based Sionic is a mobile marketing service that lets users download a free app to receive discounted local shopping offers. Sionic takes a fee from each transaction.
The company may be facing an uphill battle raising funds for a service in the same space as LivingSocial, Groupon, and many smaller players. The whole field is ripe for consolidation, however, and successful firms that hold significant markets may be candidates for acquisition by some of the larger players. We have heard some Atlanta investors express skepticism about funding companies in this space.
The company is led by veterans of the retail, restaurant, and travel industries, including Mark Wilbourn, owner/operator of Popeyes, Checkers and Edy’s in Atlanta, CEO Ronald Herman, previously CEO of IntelliOne Corp., William Clift, a director who was formerly CTO of Cingular Wireless, and William Lamar, also a director and formerly chief marketing officer of McDonald’s USA.
-Allan Maurer
Email TJS Editor Allan Maurer: Allan at TechJournalSouth dot com.
Adobe has released patches for 11 security holes in its Flash Player software, including one reports say is already being exploited via email Microsoft Word or Excel attachments targeting Windows operating systems.
The vulnerabilities affect Flash versions 10.2.159.1 and earlier. Adobe issued this advisory.
You have to worry about all the holes in the products that make the digital world go round. I’m beginning to think we’ll eventually all need the kind of separate sandboxes that keep the bad guys out (of the sort Herndon, VA-based Nzero makes.
LinkedIn plans IPO Thursday, leading a parade of digital firms likely to go public
Business social network LinkedIn expects to launch its initial offering of stock Thursday, May 19, hoping to raise up to $274 million. It is the first major social media firm to go public, but certainly won’t be the last.
Facebook, Zynga, Groupon, Pandora, Yelp, and Angry Birds maker Rovio are also likely to launch IPOs in the next year and half.
Eight-year-old LinkedIn, an elder among those newcomers, hit 100 million users this spring (March) and achieved profitability in 2010. It was valued at $2.51 billion going by trading on SharesPost.
It plans to sell 7.84 million shares in the $32 to $35 each range. It had Q1 revenue of $93.9 million, up 110 percent from the same period last year. It had net income of $2 million.
Starbucks dominates quick-service online discussion in Q1
Starbucks racked up an online media value of $77 million in Q1, dominating online quick service brand discussions, according to measurement firm General Sentiment. It was followed by McDonald’s, which managed about half that at $37 million.
Starbucks introduced its smartphone prepaid payments system in January and processed more than 3 million transactions, generating the more than $77 million in what General Sentiment calls “Impact Media Value,” its patented metric for measuring brand reach, discussion and exposure.
McDonald’s got a boost from its allegedly “healthier” breakfast oatmeal item, which stirred considerable skepticism online, because it actually has more calories than a regular McDonald’s burger. Download the full report.
Ad serving Kindle tops Amazon best-seller chart
According to Amazon’s bestseller chart, its new, less expensive ($114 vs. $139 for the regular Wifi version) Kindle e-reader that serves up ads is outselling the other new versions, although they’re two and three on the chart.
Amazon noted sometime back that ebooks outsold hardcovers, then paperbacks as well on the site. I can understand why. I love regular dead tree books. I have a house full of them and no where to put more, but I’ve bought half a dozen ebooks for my Kindle without further straining my already sagging shelves. –Allan Maurer
Email TJS Editor Allan Maurer: Allan at TechJournalSouth dot com.
ATLANTA – Fewer than 40 seats remain for the Digital Summit, which is bringing more than 60 presentations fouces on the latest best practices and trends in social media, search marketing, mobile, cloud, design, e-commerce, analytics and entrepreneurship to the Cobb Galleria in Atlanta May 16-17.
Among the features:
Over 60 presentations focused on the latest best practices and trends in social media, search marketing, mobile, cloud, design/usability, e-commerce, analytics, entrepreneurship and more!
Keynote presentation by “Social Media King” and New York Times Bestselling author, Gary Vaynerchuk
Hear from top brands such as Google, Coca-Cola, Groupon, Salesforce, CNN, YouTube, USA Today, the NBA, comScore, The Daily and more!
Network with hundreds of senior marketers, entrepreneurs and interactive strategists from companies like Apple, CBS, Dell, Discovery Channel, AT&T, Fox News, Dell, IBM, Autotrader & Turner.
Mix with top early-stage Internet startups at the Demo Showcase.
Register now and receive a free copy of Gary Vaynerchuck’s “The Thank You Economy,” which you can pick up at the event.
Participants include:
Gary Vaynerchuk, author, Host, DailyGrape.com
Natalie Johnson, Manager, Digital and Social Media, Coca-Cola
Tom Lowry, Head of Industry, Technology, Google Inc.
Matt Drinkwater, VP of Sales East Coast, Groupon
Mitch Free, CEO, MFG.com
Phil Agcaoili, Chief Information Security Officer, Cox Communications
Marc Ferrentino, Chief Technical Architect, Salesforce.com
Ainsley TeGrotenhuis, Director of Digital Marketing, CNN
Social media users were overwhelmingly positive about deal websites over the last 12 months, but their passion for online deals is rapidly cooling thanks to growing hatred for Groupon, according to a new social media analytics report from Amplicate.
Despite recent news reports questioning the long-term viability of daily deal companies, a new study from researchers at Rice University and Cornell University shows that the companies are more popular than ever among consumers.
New York-based 
Launching this week at DEMO Fall 2011, GoSteals is a 100% free platform for every business and consumer worldwide to make daily deals. Built on top of the world’s largest mission-critical web services platform from 
Investors are giving Twitter something to tweet about: the microblogging service is in the process of raising an additional $400 million in backing – the second raise of that amount this year at a valuation of about $8 billion, according to reports. 
CHICAGO – Is there a tech boom or are we in another tech bubble? That’s the question that pops up in the face of extremely high valuations for digital media companies, particularly on the West Coast, and whenever a no-profits company such as Linkedin or Pandora launches an IPO. Sean Harper, CEO of Chicago-based 
Over the past six months, daily deal sites such as Groupon, Living Social and Gilt Groupe have attracted more than $1.69 billion in venture capital and other investments according to the new 2011 Daily Deal Investment Index released today by Daily Deal Media. Overall, 22 Daily Deal companies have received investments in the past six months.
WASHINGTON, DC – LivingSocial, the DC-based main competitor to Chicago-based Groupon in the group local buying space, has selected banks to underwrite a initial public offering of stock to raise $1 billion, according to CNBC.
Daily deals appeal to consumers always on the lookout for a bargain, with 44 percent of those in PriceGrabber’s Local Deals Survey saying they use daily deal sites. But even more (52 percent) say they feel overwhelmed by the number of deals offered via email.
Apparently, nuclear reactors are not the only thing melting down in Japan. Japanese video game developer Sega says hackers have stolen data from 1.3 million of its customers.
Google has made a deal with the British Library to digitize and make available 250,000 out-of-copyright texts from 1700 to 1870.
Many employees of tech and social networking firms such as Facebook are eager to sell their stock while valuations are still somewhere in the stratosphere, says a
Raleigh, NC-based 
Pandora, (NYSE:P) the online radio service, saw its share prices tumble below its offering price of $16 in its second day of trading. The company’s shares were trading at $13.26 Thursday as the markets close.
Not enough businesses are coming back to daily deals to make the industry sustainable in the long run, says Utpal Dholakia in his third and most exhaustive 
ATLANTA – Sionic Mobile Corp. has inched up to $1.97 million of a round now aimed at $2.5 million, down from the $5 million equity raise originally targeted, according to an amended filing with the U.S. Securities and Exchange Commission.
Adobe has released patches for 11 security holes in its Flash Player software, including one reports say is already being exploited via email Microsoft Word or Excel attachments targeting Windows operating systems.
ATLANTA – Fewer than 40 seats remain for the Digital Summit, which is bringing more than 60 presentations fouces on the latest best practices and trends in social media, search marketing, mobile, cloud, design, e-commerce, analytics and entrepreneurship to the Cobb Galleria in Atlanta May 16-17.
