There is nothing new in joining the funeral march to Groupon‘s demise. After all, the founders have already stolen millions in company money and people a lot more connected than myself have written brilliant articles about why they’re near collapse. Just based on those two sources alone, any consumer who buys a Groupon, business who strikes a deal with them, or investor who buys in to their IPO would be insane. This company is going down, but I’ve seen it happen in a very small way.
For years now, I’ve had Belden Place, a small collective website for a group of restaurants in downtown. I did it as a test project years ago and as I don’t get any money from those restaurants to promote them, I run many ads on the site. I figure that it’s a fair exchange and it shuttles a couple of dollars my way to pay for hosting each month.
Over the course of this year though, Groupon has advertised massively on this site. It makes sense as it’s the audience that they want to have–local, finding, and ad-clicking. In the last one or two weeks though, they’ve pulled every single ad that their Google AdWords campaign had been running. Sure, they might just feel that they’re not getting a good return on their money from this site, but their ads have also disappeared from a number of other sites like this one, that I run. And, come to think of it, I’ve not really been seeing Groupon ads anywhere lately.
I find this to be telling as I’ve been involved in projects at past companies that, when the bottom line starts getting scrutinized and they see that failure might very well be imminent, they yank all AdWords campaigns. Sure, you might say that Groupon has actually gotten so successful that they don’t need AdWords anymore, but this is hardly the case. In fact, they have to keep growing and “robbing Peter to pay Paul” just to keep the lights on.
I pretty firmly believe that Groupon ate it at some point over this summer and it’s just on life support at this point, hoping that those foolish enough to buy shares in its IPO will string it along. I don’t know why anyone would as two guys (one coding and one on sales) can start up a copycat of it in a week, thus giving it slightly more value than a blog and just a wee tad short of the $20 billion they claim.