Groupon and Facebook VS. Google. There is a Reason Google’s Stock is Going Nowhere.

Morning Folks!!

Now let me tie the last 2 posts together as they are all related and it shows that Google is under siege. Now that is nothing new. What's new is it is now costing Google a LOT of money, a lot of customers and for the first time they are being reactive on their heals not their toes.

It was actually my brother that discovered Groupon just 1 year ago. And until this week, I have never actually used a Groupon or purchased one.

So Brother#1 buys a Groupon for 50% off a boat charter on a specific day. Brother #2 asks “What if it rains that day?” Brother #1 did not think of that. I don’t know if they have a rain check or not. But illustrated the first challenge. But the risk might be worth the reward for the customer. Just depends.

Now let’s fast forward to now. Last Sunday I had a Groupon for a place that served breakfast that I had never been to. So at the end of the meal I whip out my Groupon and the Owner whips out his list and we begin to talk.

I asked him how he liked the Groupon. He said he loved it. He said he sold 400 of them. I told him that was the first time I had been there after living in the area for 12 years and that it was working. He was thrilled and started telling me about all the new faces he was seeing and how good business was.

Point is he saw the results. He could measure everything. It was so simple. With Google, you can wipe that smile right off. He hates wasting his money. Etc Etc. So for those that think those are different dollars, I beg to differ.

If you have a $1000 budget, you have more choice now than before and when you are faced with that choice, Groupon wins. Newspaper, direct mail, Google, Yellow Pages, Radio, TV, Magazines, Billboards and now Groupon. It eats at ALL of their profits and bottom lines. They all compete for that $1000. or $100k or $1M or whatever.

What was in concrete for decades is now fluid. It's changing and when things change you have winners and losers. Groupon is the big winner and Google is the big loser. Many don't see the connection. I do and I just showed you why by just touching the surface of all this and it is much deeper and will play out on many levels.

This hole in the wall restaurant told me everything I needed to know. If it works for him, it can work for anyone that knows how to run and grow a business. The owner is back in control and he is online and cool and all the rest. I told 12 people about this place this week. Some knew, some did not. Some that go will share it with their friends on Facebook. So Groupon can become the nucleus of your marketing efforts if used correctly. Or Rue La la or Gilt or whoever is next. It does not matter. It matters that it WORKS! It matters that it deflects and disrupts dollars from going into one company pocket as opposed another pocket.

So as I wrote last year……I am happy Groupon resisted Google’s offer. That was a BOLD move and it illustrates how much they believe in what they have. Groupon gives you the power to open a business and effectively market it from day #1.

Yes, others can/will/have copied their model. They do that because it works and that only accelerates Groupon’s marketing efforts. You can't measure the effectiveness of Groupon the way many here do. You have to ask yourself how much is a new customer worth?? How many more times will he come in and pay full price?

Did you consider that you could create an INSTANT business with just one Groupon? Just think in terms of a grand opening where most give things away. There are 'Flash crowds', you could create a 'Flash Business'. Sell umbrellas when it rains.

This is what I wrote about Groupon on December 15th: Some folks did not understand where I saw this, now it should be more clear.

“Then in a year from now they are likely to really get down to comparing results and see that Groupon is really a much better buy than Google. Which would explain why Google wanted to buy them and Groupon said no. Thank you Groupon!! That was a bold move and a win for all of us whether you see or understand it or not. Google buys anyone they see as a threat so they can control everything. Our job is to help those that can challenge them and gives us all alternatives. So pray that Groupon and Facebook and Twitter and others stay independent. If you wake up one day and Google bought them, it will be a bad day.”

The world changed in the last months. Facebook, Groupon, Twitter, LivingSocial and others have changed the course of things and the Google Highway is off kilter.

So I salute all of these companies for changing the dynamics and the playing field. This is why I have been saying this is like the first year of the Internet, Because now there are things to copy and to build on. There are now more and more profitable working models and competing forces. This rose is blossoming and we are finding that Google may no longer be the center of the universe. That's a BIG change. That's a GREAT thing.

So I LOVE Groupon. I think Facebook is the Hula Hoop of our day. And Twitter is the soapbox we each have for whatever audience we have. There are so many more emerging it will be hard to keep up with.

But the bottom line is that Groupon is the FIRST truly great marketing concept that works for any size business doing about anything. Groupon is an INSTANT business if you look at it properly. Groupon is a great tool and there will be so many ways to take advantage of it. Sorry, but Google can't compete with that. They are so busy screwing over folks that the first alternative that came along would pull many away. So many in fact that Wall Street is not going to like what they see. This is just the begining of their problems. When they see just how vulnerable the 'Invincible' is, they are going to be shocked.

Now Google is not going anywhere soon. Matter of fact, some would say their best days may be ahead of them. But the Arrogant Google that said it would never split it's stock and was going to be like Berkshire Hathaway, well that DEAD! That Google is not going to go where they expected. That Google is off course and just searching with them is becoming more and more painful.

Do I blame Amazon? Walmart? Verizon? Sears? Best Buy? Kmart? NextTag? Amazon? Target? Amazon? No, not at all. But Google may win the stupid award. Why? They may be making themselves irrelevant. When you keep serving up those results in half the things you search for, well that's just a list of national chains and some guys pay to be in the list twice. What happened to SEARCH? This is should be called the OBVIOUS ENGINE! Search you would expect a result you would not have already thought of. DUH!!

Things are moving so fast nobody can truly keep up with the innovations. Google can't keep up with the future which is changing faster than I can write this. Now Google is not Alta Vista. They have invested wisely. But Google may have lost their balance. The VC guys like Schmidt ran the company a certain way. ran it for Wall Street. And failed the last few years. But they did permanent damage and set a bad tone over those years. No longer that warm fuzzy company. What happened to a company folks used to love? My advice, get back to basics.

I enjoy looking at things in a number of ways and from many viewpoints. The way to do that is make a bold statement and then discuss. All relative points get added to the equation on either side of the argument and that always helps make things more clear no matter the subject. Many of you think there is no relationship whatsoever between these companies. I see an entire different picture coming. As always, time will tell. But I still see what I see and I am just sharing that with you the reader.

Have a GREAT Day!

Rick Schwartz