Socialmedia
Huge, sprawling article on Business Insider about Groupon since the early beginnings. It’s telling when an article about the big article is 3 pages long. Normally we would recommend reading the summary for conciseness – and because the day only has 24h – but the big article is a keeper. They got almost all of it right, except for the culture change part. It is more important, and far more disruptive, than they make it seem.
We’re at Day Two of the InfoTrends conference in São Paulo about Social Media. It’s been pretty interesting so far. Today we’ll try some live-blogging, and Monday we’ll post the notes from Day One. Just a teaser for the weekend: Julian Assange was the keynote speaker for day one.
Two stories in the “Social Media IPO Candidates” realm got us thinking that corporate governance might be under fire. Zynga is reportedly creating a triple-class share structure and Groupon has apparently engaged – voluntarily or not doesn’t matter – in pre-IPO marketing during its quiet period. “Buyer beware” indeed.
MySpace killed Friendster only to be gobbled up by Facebook. Six years after NewsCorp bought MySpace for US$ 580 million it’s now sold for US$ 35 million. Google just launched its own “Facebook-killer” yesterday. There is absolutely no evidence yet whether Google Plus or any other competitor or substitute will bother Facebook. There is even less evidence about what’s “in the prices” – what prices? what metrics? what predictability of future cash flows? – so Social Media buyer beware.
Groupon’s IPO filing has given it a “financial high profile” that it’s probably regretting. So many people have been poring over its numbers and criticizing the business model quite vocally that it may even cool off some of the excitement. Why should we care? Because once you ignore the IPO-hype noise, the underlying criticism is, for once, based on analysis of the business model via its reported numbers. It’s still imperfect, but it’s better than the guesswork of a few months ago.
Groupon’s IPO filing is finally here, and the revenues growth curve is staggering. The company makes no money and doesn’t expect to make any so soon (it’s expanding extremely fast). There are plenty of doubts about the sustainability of its business model, competition and – much more importantly – margin of safety, especially given the preliminary level of disclosure and a few corporate governance quirks such as a dual-class share structure and a preference for “earnings before all the bad stuff” metrics. Yet it’s a business that one almost has to follow for insights on how these companies can impact anything from traditional retailing to data analytics. We suggest previous posts in Buysiders.com for background.
We use an article out today on the retail banking sector’s use of socialmedia to highlight a previous, more relevant article by the same source (Booz & Co.’s Strategy+Business). The second article is called “The Rise of Generation C” and is well worth the time.
We wrote last Thursday about LinkedIn’s IPO, which closed the first day of trading up almost 110% with some “interesting” valuation metrics. While there’s talk of other Web 2.0/ Socialmedia companies IPOing, Vanity Fair had a recent profile on Zynga – a “Web 3.0″ company, certainly a buzzword we’ll hear a lot in the next few months. We remain interested in the business models arising from social media – if not in the valuations surrounding the sector.
LinkedIn’s IPO had staggering numbers today, and we highlight many stories discussing it – including one that highlights potential conflicts of interest between sellers and intermediaries in the IPO process.
From the “business models we must understand” series, group buying in Brazil is moving fast with two deals/ funding rounds announced in the last 2 days. We have a collection of links with these moves and to our previous posts on the subject.
