Groupon has put itself on the market, and it isn’t clear how much anybody would bid for the company, which is currently valued at $2.4 Billion. Alibaba and Comcast seem like possible contenders among those that would try to complement their existing interests and grow the company.
Alibaba would get a North American and European foothold that would take the e-commerce company well beyond its international base of Chinese and other Asian expats. Comcast, meanwhile, already has a $250 Million investment in Groupon via the Arairos fund, which is headed by former Comcast CFO Michael Angelakis. Comcast has put $4 Billion into the fund. Comcast could also seek to leverage its enormous national and local reach from NBC/Universal and Comcast Cable franchises.
Comcast’s Univision could also develop Groupon in the Hispanic market. As we noted a couple of years ago, the mobile-driven e-commerce Hispanic marketplace seems poised to take off. Several options also lend themselves via Comcast Ventures, which holds portfolio investments like NextDoor, the hyperlocal giant that has been struggling to define its business model.
Other companies such as IAC, seeing undervalued assets, might consider buying the company as a bottom feeder. More synergistic buyers, like Yelp and Amex, probably have too much noise going on to justify Groupon’s price — although the Yelp tie could be intriguing in several ways as it becomes more of an Online to Offline (O2O) player.
So – where are we with today’s Groupon? Clearly, the company isn’t “hot,” despite last year’s funny, helpful and expensive Tiffany Hadish SuperBowl ads. While Groupon and its Living Social unit still work with sizable audience lists, demographically, its users probably resemble home shopping channel viewers and coupon cutters more than the social driven, college-educated women that were first attracted to its cheeky email deals.
So that leaves its practical value, based on unit sales, verticals, infrastructure and sales forces. Groupon once aspired to be the operating system for SMBs, with reservation systems, payment systems, delivery and analytics. But in an effort to get to profitability and regain focus, it has mostly stripped itself down to selling local vouchers in North America and several European countries. The sales force used in these efforts is probably seen as an asset.
Recently, Groupon has also launched voucher-less restaurant sales from card-linking. That effort is relatively small, but bares watching: it has grown to 4.2 Million cards in 25 cities. Card-linking, in general, continues to show promise. It also could potentially give Groupon a stronger connection to restaurant vendors, including the credit card and payment network companies.