Gini Dietrich

My Groupon Prediction

By: Gini Dietrich | December 6, 2010 | 
130

I’ve been thinking a lot about Groupon walking away from the $6 billion offer from  Google on Friday night. Our guest blogger today, Rusty Speidel, and I had a text message marathon  about it after it happened and I asked him to give his perspective on the deal. So I don’t want to steal his thunder, which will publish at noon central time today.

But I’m trying to figure out why this is bothering me so much. It’s like when Laci Peterson was killed and I became obsessed with her trial. I didn’t know her.  We didn’t even live in the same part of the country. Yet I read and watched everything I could get my hands on and couldn’t wait for the guilty conviction to come down on her husband. I’m obsessed about Groupon turning down $6 billion like I was obsessed with Laci Peterson.

You see, I know people who work over there. I’m an entreprenuer in Chicago, which (with this deal) could easily become another Silicon Valley. The founder, Andrew Mason, is just 30 years old. I hope to sell Project Jack Bauer in five or six years. I’m educating myself on angel and VC funding. So I think I’m obsessed for all of these reasons.

But the main reasons I think I’m obsessed are because I’m a woman (and all of the large deals like this are typically run by men), because I cannot imagine ever walking away from $6 billion, no matter what I thought the valuation of my company was (especially if I had some serious competitors biting at my heels like Groupon does), and because I’m a leader who runs a business with openness and transparency so I cannot imagine having to go back to my team today to get them motivated to keep working hard, even though they all thought they were going to be buying themselves cruises and cars for Christmas this year. What a morale deflator.

Of course, I’m not sitting in the board room so I don’t know what really happened, but I think this reaks of arrogance, greed, and plain old stupidity. And I don’t think it was the founder who turned them down. I think the VC firms who got involved in October smell more money and they couldn’t come to terms with Google. I mean, $6 billion is more money than three generations can spend. Not only that, but they likely would have created a fund to invest in other Chicago start-ups so their money would have made even more money.

I’ll let Rusty tell you why turning down $6 billion is dumb, but I will say that Groupon, while it hasn’t reached its prime, is the fastest growing company ever, and is a cool idea, it is an easily replicable business.

My prediction? I think Google launches their own local online coupon model, Groupon decreases in value, two or three competitors gain steam on them, and $6 billion is lost forever.

About Gini Dietrich


Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, co-author of Marketing in the Round, and co-host of Inside PR. She also is the lead blogger at Spin Sucks and is the founder of Spin Sucks Pro.

Trackbacks

  1. […] Another Bubble? A couple of weeks ago, I graced you with my Groupon prediction. And now it seems The Economist agrees with me. Sort of. OK. Well, it’s not like they read my […]

  2. […] ego play in a long line of arrogance. It’s no surprise that I think walking away from the Google $6B deal was about as dumb as they come (and I’m willing to bet my life that they never see that kind […]

  3. […] of Groupon don’t often work for local business owners. Google it and you can find a ton of stories about how businesses got overwhelmed, lost money, etc. More importantly, Groupon’s value […]

  4. […] many readers of popular PR/Marketing Blog spinsucks.com thought so when Gini Dietrich wrote “My Groupon Prediction” and got me interested in the […]

  5. […] talking about this yesterday. He asked me if I wanted Groupon to fail. I said I don’t, but I called this in December. It’s really unbelievable to me that a company walks away from a $6B offer from Google and […]

  6. […] for Groupon – in 2010 Gini Dietrich said, “I think Google launches their own local online coupon model, Groupon decreases in value, […]

  7. […] when Google offered them $6B and they walked […]

  8. […] they turned down in order to go public, which they did less than a year later). At the time, I predicted they would falter and never see that kind of money […]

32 Shares
Tweet
Share
Share
+1
Pin
Email
[postmatic_subscribe_widget]
[postmatic_subscribe_widget]