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Google To Groupon: Drop Dead

Without Groupon or one of its daily deal clones in toe, Google still seems intent on entering the lucrative social buying space.

"When you look at our overall suite of services, especially around our advertising, we already have some things that are like [Groupon]," Marissa Mayer, Google VP of consumer products, tells MediaBistro.

"We have things like coupons and offer-extension ads that allow merchants to basically make offers to our users," Mayer adds. "And, so we're looking at how can we take that technology and put it to use especially in the location space."

Also of note, while not explicitly acknowledging Google's attempt to acquire Groupon late last year, Mayer challenged the idea that the deal would have somehow devalued Groupon.

"I think that we have both a good structure for companies that get integrated into Google," she says, "and we also have a new construct called an autonomous unit where we basically will buy a company and leave it very independent."

Long a key figure at Google, Mayer recently transitioned from search to a focus on Google Maps, local products and mobile products, and the development of "contextual discovery," i.e., using a consumers' location and context to help them find relevant content and listings.

The obvious question is "Can Google compete with Groupon in this space at all?" wonders Marketing Pilgrim, which, for its part, "wouldn't underplay any drive that might have been created within Google after they were publically spurned by Groupon. What better way to say 'I told you so' then by doing it better themselves and taking 50% off of Groupon's value?"

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As such, "Groupon CEO Andrew Mason should be nervously pacing circles in his Chicago offices," writes The Wall Street Journal. "Google may have just the right mix of cash, relationships with businesses, consumer loyalty and revenge motivation needed to out-Groupon the original."

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4 comments about "Google To Groupon: Drop Dead".
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  1. Frank Reed from Marketing Pilgrim, January 4, 2011 at 3:54 p.m.

    Thanks for picking up our piece! This will be interesting to watch.

  2. Andre Szykier from maps capital management, January 4, 2011 at 4:29 p.m.

    Google made the right decision. Most of the monies from Digital Sky (Russia) would go to build out their sales force which probably is driven on a commission. Google could easily mechanize this process to provide web onboarding and coupon offer placement on their search engine.

    Alternatively, it would be an excellent addition to their Froogle site that does not have enough market penetration against web competitors.

    Finally, Google is well positioned to provide coupon redemption cloud services which would help both the retailer (mobile 2d barcodes) and the packaged goods mfg companies.

    When you couple this with LBS and time limited redemption, big retailers would work effectively with Google in this area. All that's missing is providing ad metric services similar to what they already do with Adwords.

    This is an explosive market in an economic downturn and Google has all the piece parts to make it happen. Unfortunately, their expertise and background of a lot of their key executives are too young and probably not that challenged to work on such a venture. They need some old blood with vertical market experience to drive the technology to market.

  3. Alex Romanov from isign media corp, January 5, 2011 at 1:37 a.m.

    I would love to see Google enter the LBS space with our Proximity LBS solution with interactive shopper measurement. The right offer at the right time in the right place. Very relevent at no cost to consumer and with no privacy issues.

    Google can make this their ubiquitous industry standard for in store, in mall and in any place where the shopping public gathers. Attract Interact Measure anywhere.

  4. Jerry Foster from Energraphics, January 5, 2011 at 5:24 a.m.

    Is there a link to an article somewhere that discusses this Mason guy's personal and financial situation in light of his decision to forgo six billion dollars before he turns 30?

    Is there a link to an article somewhere that discusses the biggest personal mistakes greedy entrepreneurs have made in history, turning down deals that would have let them live like Rockefeller only to end up in relative or real poverty?

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