Saturday, December 4, 2010

Groupon's Billion-Dollar Brand Miscalculation: They Don't Realize That They're A Commodity

OK people.

The next time you hear someone say that branding is fluff, start laughing.

Because Groupon just made a miscalculation about its brand that they will be crying mightily over in the end.

The Chicago Tribune reported today that Groupon turned down a $5-6 billion acquisition offer from Google.

They think they can do better?

The stupidity of this decision is rivaled, in my mind, only by Yahoo's decision to turn down Microsoft's offer to acquire it.

The only difference between Groupon and Yahoo! is that Yahoo! actually is a valuable brand, whereas Groupon is not.

Groupon is a commodity.

Anyone who can copy what they're doing (I give that one year to happen) and can figure out a way to actually brand themselves - as opposed to lazily relying on name recognition and email signups - is going to turn them into mush.

Bad decision, bad decision, bad decision. Seems to me it was based on blind arrogance and greed.

A lesson for the rest of us: Just because you're doing well, doesn't mean that you're a successful brand.

Sometimes it is wiser to, as they say, "take the money and run."

In this case, the $6 billion.