Savvy consumers get their coupon on with Groupon. Tapping into the power of collective buying, the company helps businesses attract customers by offering them a unique way to save on things to eat, see, and do in more than 500 markets worldwide. In each participating city, Groupon advertises a daily deal, typically a half-off coupon for anything from a local restaurant or retail store to a hotel or spa; if enough consumers buy the coupon online by midnight, the deal is on and the featured business can achieve a nice chunk in sales. In late 2010, the company rejected a reported $5.3 billion buyout offer from Internet search giant Google. Groupon went public instead in late 2011.
Groupon filed its IPO shortly after online networking service LinkedIn's initial public offering flew off the shelves. Looking to capitalize on the market momentum generated by LinkedIn and other social online services, Groupon initially expected to raise about $750 million by going public. Eventually the offering raised around $700 million. The company has used the IPO proceeds to invest in growing its global brand and improving its technology.
Geographically, the US is Groupon's largest market, followed by Canada and Europe. The service has expanded into more than 40 countries, partly through acquisitions. In fiscal 2011, the company earned about 60% of its revenues outside of North America.
Groupon now reaches more than 80 million subscribers worldwide and uses its website (searchable by locale) and opt-in e-mails to help businesses market their goods or services. The group buying model is a red-hot trend with smaller competitors and startups racing to gain some of the company's market share. The Groupon model was designed as a lower-risk alternative to traditional advertising. Whereas most marketing campaigns -- print ads, radio spots, and TV commercials -- require upfront payment, Groupon costs businesses nothing out-of-pocket. Once a daily deal reaches its buyer quota, also called a tipping point, Groupon takes a cut and the company takes the remainder.
Looking to corner a key market, in 2011 Groupon teamed up with Live Nation, the world's largest ticket seller, to form a joint venture, GrouponLive, that offers group discounts and promotions for local tickets to concerts, sporting events, and other attractions. Groupon also rolled out a mobile version of its service (Groupon Now!) in 2011.
Groupon evolved out of privately-owned The Point, a technology platform that organizes not only group discounts but other campaigns that require group action, such as organizing events, creating petitions, and raising money. Today, Groupon serves a wide range of industries, including automotive, beauty and fitness, consumer goods, electronics, entertainment, fashion, financial services, food and beverage, health, and travel. Businesses can sign on to be featured on Groupon through the GrouponWorks portal. A feature on the Groupon website can attract thousands of subscribers in each city, who then can share the offer through Facebook, Twitter, and other social media to create even more buzz. Demographically, Groupon tends to attract younger, Internet friendly consumers. The majority of its subscribers are college educated and fall between the ages of 18 and 34.
Co-founder and chairman Eric Lefkofsky and his wife own more than 20% of the company.