Google Threatened on Multiple Fronts. May be Disrupting Their Own Business.

Morning Folks!!

I am amazed that so many domainers do not understand why Groupon came out of nowhere to be where it is now and a threat to Google. Stop looking at things like a domainer. That is short sighted. Look at it thru the average consumer, the average small business. When you do that, everything looks different.

Let’s start here. More retailers on Main Street have tried Groupon in the first year than have used Google in 7 years. There is a reason for that. I can’t believe so many folks are missing that. Maybe they need to talk to the business owners that use and LOVE Groupon.

Results they can see, measure and make money with as they instantly grow their businesses.

Google for the first time is REACTING to both Groupon and Facebook and Twitter is still a tool. Google is no longer setting the agenda in the way they did just MONTHS ago. They are wobbling and a talent is leaving.

Will Google ever get back to $750/share? I sure as hell could make a case that it won’t happen. That the numbers a year from now will look terrible compared to their past growth. That Schmidt was brought in to raise the value and with his departure will go the stock price.

Groupon a fad? Could be. But fads have disrupted things before. A fad may only be a stopping point to something even bigger. But I don't think it is such a fad. It will last too many years to be a fad. By that time it permanently changed the landscape.

See, I have seen similar scenarios play out during my life. A cycle of sorts that repeats itself. The names change but the events don’t. Just different facades.

Google is being disrupted and now they are trying to disrupt. It shows a reaction as opposed to leading. It won’t lead where they expect and that opens up a can of worms that they can never control again. Knowledge is power and they are going to be met with opposition as the little guy embraces Groupon, Facebook and Twitter because they understand it better than they do Google. They see the results. They get it.

You can't be myopic on this. There are just too many things to look at and outside forces not in their control. As domainers we may look at it one way. Just keep in mind you are only looking at it in one way. But how does the retailer look at it? The manufacturer? The ma and pa businesses? The consumer? They count more. Google can make a bad decision somewhere along the way and it could end up doing more harm to themselves than even those companies mentioned could.

Have a GREAT Day!

Rick Schwartz


18 thoughts on “Google Threatened on Multiple Fronts. May be Disrupting Their Own Business.

  1. Jp

    Honestly I haven’t used it, but from my understanding Groupon is way better essentially by definition for the brick and mortar customers.
    If you sell something online then both companies can compete fr your attention.
    But why buy adwords to send someone to a coupon page on your site when you can do the direct-to-results groupon thing instead. Conversion rates are usually better with D2R


    Well said. But what is the ratio of those that LOVE groupon and those that hate it. Is more expensive to use Groupon and the business model of Groupon doesn’t fit small to medium businesses.
    Majority of small and medium businesses are now shifting their resources toward social platform (Facebook and Twitter) and only this two players can really challenge Google.Not Groupon. Groupon is here to stay simply because people will be looking for bargains but only fewer businesses will be using it.
    Do you think startup companies will go on Groupon? No. They will rather use social medias or Google hence Groupon is not a treat to Google.

  3. Rick Schwartz

    “Groupon and the business model of Groupon doesn’t fit small to medium businesses.”
    That is a false assumption. Completely at odds with what is happening. I will have a blog post on an example of a VERY small business that sold 400 groupons and is grinning from ear to ear.
    Groupon is 100% scaleable to any size business.

  4. nr

    how is groupon disrupting google’s business such as android, youtube etc? a lot of people are using groupon on their google android phones. there are tons of complaints and lawsuits being filed against groupon right now from unsatisfied stores. google could still buy groupon and shut it down if they want.

  5. Joey Starkey

    I live in the Memphis area and the business community has jumped on the Groupon Banmdwagon in a big way. Not to maention many other people are starting”Groupon type” sites for smaller local businesses.

  6. TLD

    IMO Google is reacting instead of leading, but I don’t see how their reaction is to Groupon. Groupon is not a sustainable business model for small businesses to use. A small business can offer $50 of their product/service for $25 (actually they get less since Groupon takes a cut of the $25) and they use this to attract some new customers. But they can’t keep running Groupon deals every week/month because most of them lose money on each transaction.
    Google is reacting to critics. Critics say that Google’s search results are weak so Google is now trying to appease people. They are doing this because they fear Facebook. It’s all about Facebook at Google. Fight for employees that jump ship. Fight for most visited site on the net. And Google is fearing soon a fight for search engine users if/when Facebook comes out with their own search capabilities. You can see this plainly as to the fact that Google has adopted their results to include a ‘social’ impact. Because that is what a Facebook search engine would be all about.
    In the past Google would lead, and wouldn’t allow outside critics to influence their bread and butter product… now they are.
    Social search is a whole different beast then a regular search, and now instead of a domain like”” getting top billing for the phrase”visit Berlin” it could be replaced with a site about Berlin that a bunch of people Tweet about. That is great if the masses are brilliant, but we know they are not. They are more like to Tweet about a viral video about a”guy visiting Berlin” who has something funny and now that will get a top billing in Google.
    Besides search, Google hasn’t done anything right on its own in terms of creating revenue. And now they are ruining their search.

  7. EM

    The local small business I work for views Groupon as a no-money up front advertising campaign. The beauty of it is that the customers that buy the special are direct leads as opposed to those coupon-clipper flyers that charge $250 per insert with a minimally targeted market. It can’t be viewed as a per-transaction profit because you may get inquiries beyond just the sales pitch itself. Facebook and Twitter won’t even come close to this kind of direct-market campaign because no one in Boise is going to jump on a buying opportunity in Erie.
    I’ll”Like” a bike shop on FB that I’ve never been to just to win the Gift Card but that doesn’t mean they’re converting sales because they haven’t. By the same token, if I buy a tune-up on Groupon, I’ve already committed my money to that shop and that’s a huge incentive for me to get my bike in there. During my last tune-up, I spent an extra $120 on gear and other services and now I’m a regular customer. I don’t even know if the shop has a Facebook page.
    As far a Google goes, no one I know even clicks on Google ads anymore.

  8. Tom

    I subscribe to 3 of Groupon ‘minor’ regions – and they just combined all three into one; which makes me wonder if Groupon has reached a peak of interest.
    I don’t think they are on their way out – but there are 2 things here: 1. I am already tired of looking at Groupons that I am not interested in.. and 2. As the (or if the) economy recovers, people will be less likely to be looking for deals and bargains.

  9. John Y.

    Google shares (“GOOG”) down about $40.00 per share now (Noon EST)TO $539 after inpact of new earnigs report..that’s about a 7% drop….biggest decline for that stock in ages….obviously, regaining that $750 price level just got a whole lot tougher for GOOG
    Furthermore, that intensifying anti-trust investigation being conducted on G by the European Union regulators will be interesting to follow.

  10. nick

    how about this.. from where i sit.. groupon is only for the top 20% of america.. you know spas, yoga e.t.c Theres that 80% of america that is still couponing like crazy.. There are BILLIONS TO BE MADE with those people. Groupon controls a good portion of that 20% top premium market and of course every new wanna be player is trying to go after the same market which wont happen. :) Small businesses have been killed by google with their pay per click.. it just doesnt make sense… it really doesnt for a business with $500 bucks a month for advertising and is paying 100 bucks a day for only .4% conversions. I know these guys they call me every day wanting a website and cant come up with 1500 for a website but they can pay you $400 bucks a month for managing their advertising. Mobile is just picking up – and development costs have never been cheaper – the kind of plugins you can pick up for wordpress are Freaking insane.. Of course with googles new change – it just created a new market for s.e.os. But S.e.o without the right domain is worthless..frankly i never bother with nothing less than an exact match domain. Groupon is going to have to evolve.. especially for restuarants and that sort of business where they cant afford to have groupon taking 50% of their 50% deal… but oh Groupon is going to be around.. and facebook has one hell of a climb and it wont take groupon down overnight.. even though they own all the traffic.. groupon is doing some heavy Nasty Dirty lifting out there.. you know the HARD WORK.. not that techcrunch hoity toity crap. Pretty interesting .
    Want to know just how much demand for anyone with a modicum of ability online is.. about a year ago i was running around trying to get small businesses to sign up for a small web design plan.. now i sold my car in Raleigh .. trust me you never sell you car here.. and if someone for sure wants to deal with me.. i give them my adress.. come over.. deposit money in my bank account and i will start working on your project… I had a line of people 2 weeks ago. and already havent the rent paid up.
    Oh and with the seizure of domains by Newyork means.. gambling legalization is just around the corner.. Keep those gambling domains CLOSE.. $$$$ on the way.

  11. Altaf

    I am doing Goog Adw. Clearly advise pls is it worth or no? Then I will not waste my $$$ for ..

  12. Damir Tankovic

    Groupon is a global business concept that fits any business great or small by offering great discount – minimal profit maximum turn over that is suited to expand the business be it selling products or services.

  13. Bill Roy

    Nick, your analysis regarding small business and Google mirrors my own interpretation of the market at the moment. It seems that Google, for all its self advertised benefits for small businesses, is far from producing a satisfactory result in terms of ad dollars spent by such small businesses.
    Unfortunately Google has failed to take account of the nature of small businesses. Here I can give a personal example as a domainer. I advertised a domain for sale via Google to a select market, initially the cost per click was merely $0.16, however within a couple of days I received notice that the minimum cost per click would have to be a minimum of $8.00 (I have altered the amounts from GB Pounds to US $ for ease as most readers will undoubtedly be in the US). When I checked for ‘similar’ terms they remained at $0.16 per click but Google would not let me enter anything less than $8.00! This undoubtedly was a purely false market being created by Google. What is worse is that exactly the same thing happened again a few months later for another advertising term. Needless to say I ceased the campaigns immediately. (As I have said elsewhere in a reply to another of Rick’s blogs – I am no fan of Google.)
    What is so ironic about the present situation is that online advertising can be compared on a cost-to-cost basis as the very cheapest production costs for the medium concerned. Consider the costs to the medium provider of a TV, radio, or paper print advertising mediums, hell even Bill Boards I think would actually cost more to maintain than the average website. When one considers that Google do not actually run the websites then it becomes rediculous that they have out-priced themselves as far as small businesses are concerned with regard to advertising.
    Having said the above it should be aparent that there is therefore a huge opportunity to fill the niche market that Google (and others) have not only ignored but seem to have gone out of their way to alienate. I hope that in the next few months to personally be envolved in taking the opportunity to remodel how local small businesses can advertise affordably to their target market audience – and there is no rocket science involved.
    Google has by its very own success become open to threats by competitors – the vast majority of whom were not even around when Google was first conceived as an idea. The great big Google beast as exists today has become so huge that it now is under attack, as Rick rightly points out, on so many fronts that it can ‘only try’ to react to the changing situation it finds itself in. Whilst under these numerous attacks Google is no longer able to evolve and dictate change in this area, it is at best simply shoring up its borders of its empire as best it can. The real threat comes from multiple simultaneous assaults by smaller competitors rather than an all out assault by a single large competitor.

  14. Diane

    I thinks it is/was smart business that Groupon used Google Adsense to advertise & promote Groupon and I find it funny, even ironic that the almighty Giant G didn’t even see it coming. Ironic in that Google is”supposed” to promote business…so I guess in that way, Groupon got what it paid for from Google. Kind of dizzy, huh?
    Just goes to show ya…anything is possible!

  15. James Cogan

    I have personally spoken with 110+ small/medium sized business owners who have used Groupon in the last 12 months as we prepare to launch a competing (albeit different) service here in Canada. I can tell you first-hand, the majority of them were not the least bit happy with the experience. Yes, it brings ppl in the door and for that Groupon is far more actionable than ie, adwords. However, the margins many businesses have to use to obtain the Groupon traction is not only unsustainable but has often led to a money-losing scenario for the proprietor. Groupon is still riding a wave as many businesses are still trying/testing it out for the first time. However, there is a cycle here, and I suspect Groupon’s downhill curve will eventually be quite steep.
    I think the most fascinating aspect of your post is the surprise you seem to have that Google is not leading in this space. Why would you even assume that Google would always be the one innovating and leading? That view is myopic in itself, and they have not been leading in many spaces for a long time. To suggest that this is the ‘first time’ Google is in a reactionary position is absolutely false. Companies have been disrupting around Google for years and Google has reacted, in many cases, by acquiring the opportunity/threat. Suggesting somehow that Groupon represents a unique turning point for Google is a very narrow view. Very narrow. Google is Google. They will not have their fingers in every pie from the get-go, if you assumed they would, that is surprising coming from you Rick. Yes they are big, yes talent will leave, yes the market will continue to disrupt around them. This is your typical trajectory of a highly successful company. This is a non-story. Mah nishtanah ;-)

  16. Main Street Bob

    Groupon, is a successful model which is based on other past attempts at getting market results fast from big discounts. There is a book that comes out every year (forget the name) was popular for a few years, then faded, because the business owners weren’t getting enough bang for their buck, or simply stopped because they got enough of a growing customer base to advertise on t.v or radio.
    Just a thought. Most workers get paid AFTER they provide a service.
    GOOGLE doesn’t need to worry as much about groupon or facebook as it does it’s own integrity when it comes to searching and advertising.
    Mabye the fairest way to grow is to completely copy models of the real financial world, forget about advertising as advertising or searching as searching, and look at online things like these as SERVICES. Ok, so I provide the service FIRST. then i get paid.
    GOOGLE SHOULD GET PAID only if the website owners profit. this is where things are once again ass backwards.
    when you buy a groupon, you know for sure it’s going to be a win win deal. but, when you give google 500 bucks a month and only see growht of .05 percent or none at all, then something is wrong.
    NOW,if google really thought my website was good for their users *whole world in their SEARCH HANDS… then they should do away with ppc, and pay up front. otherwise domain owners will join the dinasaurs and become extinct.
    A domain is a worthless thing unless advertised, but advertisement is a worthless thing if it costs more than it returns.
    GOOGLE is never going to keep on top as a search engine, but their YouTube and Google Earth among other services are TOPS. and we are moving into more of a video, talk based internet, where even a keyboard won’t be needed with speech recognition and other technology.
    ADVERTISERS have already started waking up. GOOGLE would be better at what’s left of their search engine and ppc to OFFER THEIR data base to affiliates or franchise webmasters… who may want to promote the data and search results in more creative ways.
    One thing is for sure. PPC advertising the way it was / is still being run is doomed to fail… no transparency. no integrity. no fairness. unless everyone wins, then no one can keep winning for long. the search engines (service) the websites and domains are all very much an equal trio. *with domains being the most valuable if they are great ones (cause they can’t be changed or competed against….
    so, spread the service, spread the wealth, advertise for all business owners for a COMISSION, not make them PAY first. Base it on
    sales growth or direct sales and all transactions and sales need to be 100 % transparent, none of these”it’s a secret formula shit” so you’ll just have to trust us and our data. . . Why would I ever give a company a penny that isn’t transparent about what’s being done with it, or how much they are making from my site.
    GROUPON, may survive, but google can easily start their own groupon, I mean, the method is not trademarked or patentable, just a fad that’s working. WINNING for the moment. so, how hard would it be for google to start GOOGPON ? ? ? LOL. as far as facebook, well, google could start GOOGBOOK, IT’S not that difficult to imagine. and with their popularity, the would be able to compete easily.
    sometimes I think that all those companies must be in some kind of cahoots, or a monopoly behind the scenes. KNOWLEDGE is POWER and the people generally are slow to wake up and realize they’ve been scammed once again.
    So much for real change. I’m waiting for the PROOF.

  17. Main Street Bob

    one last observation today. if google had followed a win-win stratedgy and did away with ppc and only profited from the websites it eiter paid first, or took a commision from instead (eg. they get paid when the website advertiser gets paid ) THEN they would be much more profitable from advertising new upshots then advertising for by the ppc. die by the ppc. lol. if google would have had a deal (commission based) that said we’ll promote these for 15 percent or whatever, think of the outcome…. mmmm… It’s ok to USE each other (we are all co-dependents) but let’s not ABUSE one another. or instant Karma WILL slap us in the face SOONER or later. this time google deserved it !

  18. nick

    Well ill be honest with you if youre pushing s.e.o to a then you are just killing yourself and loosing alot of money. It depends on your niche and how youre doing it.
    Sometimes you might want to instead approach ppc from a demographic standpoint but thats something we would have to discuss about. :)
    Hit me up on skype: nmwando if you want to chat.


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.