Google to acquire Groupon?

Groupon is a deal-of-the-day website that is localized to more than 150 markets in North America and 100 markets in Europe, Asia and South America. The company offers one "Groupon" per day in each of the markets it serves. The Groupon works as an assurance contract using ThePoint's platform: if a certain number of people sign up for the offer, then the deal becomes available to all; if the predetermined minimum is not met, no one gets the deal that day. This reduces risk for retailers, who can treat the coupons as quality discounts as well as sales promotions tools. Groupon has seen enourmous growth this year, and was a recent hot topic after being featured as one of Oprah's favorite things (Although, I cant imagine Oprah has used a coupon of any kind since the Reagan Era..). Their rather simple, yet brilliant business model, combined with Groupon's choke-hold on the online localized retail market, has made them a target for all of the major major players in the tech game including Yahoo and Google.

After Marissa Mayer, One of Google's first 20 employee's and most recently the head of Google Search, was put in charge of location and local services, it was widely believed that Google was going to be making a move into the location-based social networking space (think Foursquare or Facebook Places - click for me info). The question everyone asked -Why move one of the most powerful players at Google to head up an emerging, small, and recently reorganized area of the tech giant? After news came out in the last few weeks ago that Google offered CEO Andrew Mason close to $6 Billion to acquire Groupon, the Mayer move seemed to make more sense. "A $5+ billion purchase - even for Google - is not something to be taken lightly, and it would make perfect sense to put Mayer - who is still only 35 years old - in charge of what many believe to be the next big thing." With 700 million global monthly unique users, Google can achieve a wider distribution of the 40,000 merchants that Groupon has lined up that are waiting to get thier deals listed. Will Groupon accept what would be the third richest acquisition in history? For now, the world will have to wait and see.

UPDATE:

Late last week, Groupon rejected Google takeover bid, and Bloomberg is claiming they know why. The social deal leader is betting it can keep increasing its valuation after walking away from a deep-pocketed suitor. As the story of Yahoo demonstrates, it's a strategy fraught with risk, but - as Facebook shows -great potential, too.

Thoughts and resources:

• Did Google put Marissa Mayer in charge of local because of Groupon? http://bit.ly/eJf1Af
• Try Groupon yourself: http://www.groupon.com/

Google aquires Metaweb to Improve Search

Over the course of the last few years, search engines have been moving to provide users with more relevant results by adopting third party data. This week, Google aquired "semantic web and real world database company Metaweb, a move the company says will help them improve search and make the web richer and more meaningful for everyone."

See below for an interesting clip that breaks down how Metaweb will change the way you search:

Thoughts and resources:

• Another third party may be entering the search space - Foursquare in talks with major search engines: http://bit.ly/cLC2aN

Explaining Search Engine Marketing to Your Great Grandfather

I recently had an interesting conversation with my 94 year old grandfather. He spent more half of the last century in the advertising industry and is ecstatic that I followed in his footsteps. But, in reality, he doesn't even own a computer, let alone understand how advertisers are utilizing the digital space to reach consumers. I attempted to explain, and he pretended to understand. One thing lead to another and we began to discuss how search engine marketing worked. I used storefronts on a New York City block to describe the process. Thought I would share this to mark a week when we brought two other Stern client's SEM efforts in-house.

I explained to my grandpa that search engine marketing takes place in an electronic marketplace and refers to the placement and location of retailers in a new age market. SEM seeks to increase the visibility of the butcher, tailor, pharmacy, etc.

The heaviest oncoming traffic runs in one direction passing a series of stores. The first store on the closest corner, a butcher, is naturally the first to come into view for those passing by and therefore gets not only the most attention, but also the most business. Because of the butcher’s excellent location, it will have the highest monthly rent. The tailor next door, and each subsequent store on the block will have slightly lower monthly rents due to the fact that they receive less exposure, and therefore less business.

Thoughts and Resources:

• Figured I would completely lose him if I attempted to explain how the relevance of the website in relation to the searched term plays into the equation..
• Google's face lift: http://bit.ly/NewGoog
• More information and a history of search: http://bit.ly/SEMwiki

Google Chrome Viral Campaign

With its newest release of Chrome, Google wanted to show us how fast it is rather than just tell us how fast it is. To do that, they made a Rube Goldberg-ian video showing how fast web pages load in Chrome. And yes, its awesome.

This extremely creative viral video has 1.5 million+ YouTube views in less than 7 days:

• http://bit.ly/GoogViral

Thoughts and resources:

• Making the Google Chrome Speed Tests: http://bit.ly/GoogMakingOf
• Convinced? Make the switch like I did at Google.com/Chrome

Recent Growth in the Social Media Space

This past week marked several significant steps in the ever changing state of the social media space. Google, the internet search leader, released Google Buzz. Similar to Facebook, Google Buzz will let Gmail users post updates about what they are doing or thinking and share those with the rest of the world or with only a select group of people. Gmail users also will be able to track other people’s updates and instantly comment on them for everyone else in the social circle to see. And, just like Facebook, Google Buzz can serve as a showcase for video, photos and Web links to interesting stories. Google Buzz also shows similarities with Twitter, an online communications tool that broadcasts messages of up to 140 characters. A mobile phone application of Google Buzz is particularly Twitter-like: It allows people to see the public updates of other people in the same vicinity.

Google tracks a wild amount of information on each of us as consumers. To me, Google Buzz feels like yet another way for Google to gain more ammo for targeting its search engine and display advertising towards each of us. Similar to how FB ads work, when we enter info about ourselves in the 'about me' section, Google could (and probably will) use that consumer information to target ads towards us. The bottom line: Google, who already offers arguably the best targeting capabilities on the web, is looking more and more like ‘Big Brother’ every day.

In other social media news, Facebook’s new redesigned homepage puts search front and center. Just after its 6th birthday, the largest global social networking portal in the world unveiled a newly redesigned site that positions applications and games to stand out more. Links and items have moved around the home page as Facebook tries to streamline navigation. FB is putting an obvious emphasis on search by making the search bar larger and in the middle of the homepage.

Although Facebook is undergoing a lot of changes, I would be hesitant to buy display advertising on the site. Yes, Facebook offers powerful targeting capabilities by pulling information out of our profiles to serve us specific ads. But, many users see FB as their own personal space, and very well may rebel against a brand. If you are interested in pursuing Facebook advertising, I would suggest testing the waters before committing to a high monthly spend. FB now offers cost-per-click advertising model (you only pay when an ad is clicked, not per 1000 impressions like most display advertising), start with a low monthly spend limit and increase if you are having success.

Thoughts and resources:

• 4 Ways You Hadn’t Thought of Yet to Use Facebook Ads: http://bit.ly/4GC3qz
• Facebook Will Serve its Own Display Ads, Cuts out MSFT: http://bit.ly/9ngGI0