Memo to Groupon: 'Hurry, This Deal Expires Soon'

PointCast . . . Yahoo! . . . Groupon??

Insiders say a tentative deal was struck in which News Corp. would acquire PointCast for $450 million. But before the papers could be drafted, issues surfaced over PointCast's revenue projections and the price tag, insiders say. The offer simply went away.

--"PointCast, The Rise and Fall of an Internet Star" ; Bloomberg BusinessWeek (April 26, 1999)

So, apparently Groupon's founders have passed -- for the time being -- on Google's $6 billion buyout offer ("Groupon's Sales Price: No Bargain?").

Owning shares in neither Google nor Groupon, I "don't have a dog in this fight," as they say.

Nevertheless, it's hard not to draw historical parallels with earlier technology trailblazers like PointCast and Yahoo!

In both cases, each company attracted -- and rejected -- rich takeover offers from much, much larger but behind-the-curve players (News Corp., Microsoft) who viewed an acquisition as a way to leapfrog competitors.

When PointCast and Yahoo! overplayed their hands, the deals went away -- and so did their (momentary) industry-leading positions.

Driving home the point: an email in my inbox just this morning, whose subject line trumpeted: "Hurry! This deal expires soon - 80% off Cleaning, Exam, and X-rays!"

Groupon?

Try, Angie's List.

(Can you say, "low barriers to entry??").

P.S.: On a personal note . . . want to know why Yahoo! named its (now-defunct) monthly magazine "Yahoo! Internet Life?"

Yahoo! approached yours truly in 1997 about buying Off-Line, my copyrighted newsletter covering online Investor Relations at the time.

I declined.

As they say, "Oops!"

(I never did find out how much it was worth to them. I suppose it's possible the answer was, "not very much").

Groupon's Sales Price: No Bargain?

Google is near a deal to acquire Groupon, the pioneering online discounter, for as much as $6 billion.

--The New York Times (11/30/2010)

There's got to be not a little irony in Groupon being bought out at something like 15x its annual revenues of $350 million.

By contrast, established consumer goods companies can sell for 2x-3x revenues.

"Groupon," Defined

Online Advertising Blitz

If you've been reading this blog -- or practically anything online lately -- you've probably encountered ads for something called "Groupon."

Group what??

Honestly, the first time I encountered the word, I thought it had something to with "grouper" (the fish) or "croup" (the very nasty cough).

In fact, it's a combination of the words "group" and "coupon": 'grou-pon' -- get it?

Products vs. Services

The company behind it is apparently buying up oceans of online ads on everything from mega-Web sites to little blogs like the one run by yours truly.

The concept is to use groups (and their concentrated purchasing power) to wrangle discounts from all manner of retailers and service providers.

That seems fine for goods like TV's or toothpaste.

However, I'd be leery of getting a haircut or massage from a (small) outfit that just promised to give a couple thousand online bargain hunters like me discounted services.

Or, I'd just be sure to go first . . .