Actually, given the pace of change in online/social/deals/commerce/search business models, I wouldn't be surprised to learn that D eventually comes true, but in the meantime, I'd just like to take a step back and observe how confusing this business truly is that the biggest players can't figure out what their core business models are, and keep on trying to cannibalize on each others', forgetting what it was that brought all those gazillions of online users to them in the first place.
Obviously, there's a lot of ground to cover here, so let me just pick one of these developments - the rapidly shifting ground in the online deals marketplace - and focus on that one for today. Facebook Music and Justin Timberlake's MySpace can wait for another "Social Graf," and by that time I'm sure Twitter and Foursquare will also be playing beautiful music.
The hyper acceleration of the online daily deals marketplace has been the most surprising one to me personally this year, and it's the one that seems more than any other social media phenomenon, to be approaching bubble-busting proportions. And according to a really interesting analysis of Groupon the good people at PrivCo passed along to me, it may already have popped - even as Google and others try to muscle their way into it. For all the hype surrounding Groupon, including at least one press release a day about it expanding into some new market, the daily deals progenitor apparently is on the brink, and is seriously in need of both a cash infusion and some rethinking of its underlying business model.
"The group buying company faces an imminent need for financing due to a deteriorating cash position," reports PrivCo, projecting that at its current burn rate Groupon faces "an impending risk of insolvency (bankruptcy)." In other words, some liquidators may get some very good deals on Groupon's assets (if they have any) and some creditors and investors may just get screwed.
PrivCo cites the emergence of "new, better funded competition," especially Amazon.com (dang, I left Bezos out of my multiple choice lead graf) backed Living Social and from Google. Unlike cash-strapped Groupon, Living Social has $500 million in cash, and Google has more than $40 billion. So who do you think will win that market battle?
Compounding the cash equation is the fact that Groupon's once dominant market position is getting increasingly fragmented by new competitors and, worst of all, consumer usage is beginning to fatigue. In fact, PrivCo's Joseph Ranzenbach says it has fallen off a cliff, and has eroded nearly half over the past year.
"The average registered Groupon member, which as recently as March 2010 was spending an average $5.70 per month on Groupon, is now spending nearly half that, at just $3 per month and dropping." It could be that they're getting such good deals, they simply need to spend less. Or it could be fatigue, fragmentation, and competition. Or it could also be the fact that the economy isn't so hot, and no matter how good a deal is being offered, it's still no sale if the group you are offering it to is out of work, or worried about it.