Groupon IPO

And finally the Groupon IPO is coming in the first week of November. I have written twice long before, that Groupon business model is weak because it can be replicated in about  1 minute. I may be completely wrong about this, however you do not reject an offer for 6 billions dollars from Google, this seems like kind of crazy!

Now the time has come to prove me wrong or right. Groupon is valuing the company at 12 billion dollars but its IPO is just 5% of shares, which make it the smallest IPO ever, almost. This work both ways: the thin offer could cause great demand and by the end of the day the company will be worth 35 billion if the stock triples or worth 8 billion if it falls half the price. But why are they doing this?

My take is the following: If an investor bought 100 million shares on second market worth 100 million dollars, it sells 5%, 5 million shares at 16 is 80 million dollars almost the initial investment. I believe this is my guess of the situation they are selling 5% so the initial investors  loose just  20% or 30% of their investment. Not bad as an strategy to recover an investment first and second renember GS and MS are one of those investors.

I will see what happens and for sure get back to the topic.

Technology and Self Realization

Today as I was chatting, one thing I realize about how wonderful technology is working on people's minds. Sometimes even if it is annoying to see the "text all the time" people however the use of it make people more concrete and determined in their thoughts and detach from emotions. As one can transfer the emotion to a little face on our chat, we I think become one more aware of those emotions and less involved with the feeling. Even when I am upset and put a red face, I calm myself down and I am more and more detached with the feeling of being upset, happy or whatever.

This is what in yoga is uncoloring the thoughts and the more detached the more spiritually advanced one becomes, who would thought that technology will help so much on one hand and on the other the universe will always work for our advancement and self realization what ever means necessary.

Analizing GILT

Gilt, is not a social media company but it has a similar idea:  belonging to a special, unique club in this case a clothing club by invitation only. Something like Facebook meet Groupon for clothing. They are one of the growing,  flash sales website and have become one of the seek after companies for IPO. They also have GILT CITY which is a kind of  Living Social with pretty decent deals although somehow the do not grab my attention as Living Social or Groupon does. Recently they added GILT Taste. This one is not a flash sale site but a very expensive internet food site. GILT in this case has lost completely focus on their core business not only from the flash sales point of view but from the clothing point of view unless you  intend to dress Lady Gaga. I was visiting the site today and although food  other than meat looks delicious [I do not eat meat], I was wondering how will GILT feel if Dean and Deluca decide to start selling dresses on their online store, or what about Eataly selling Italian clothing luxury brands?. Choosing food as a way to grow seems rather odd. Food speacilly meat and fashion they just do not mix, unless you are Lady Gaga. Women, in fact, rather dress than eat. I would consider cosmetics and parfums flash sales, more related to their core business.

Microsoft-Skype and the Social Media New Breed.

Two very important events had happened in the last two weeks, one Microsoft buying Skype and the Linked In IPO. Although not related, it seems like Microsoft put a tab of 8 billion dollars for  social media companies. Well, actually, it was set before with Google rumor of buying Groupon for 6 billion dollars. The LinkedIn IPO was out and the company now has a value around 9 billion dollars as well.  Skype has around 500 million users with a revenue of $860 million. LinkedIn has 100 million suscribers, $243 in revenue, both belong to the new social media internet companies.

This is setting the 8 billion mark for the next breed of internet companies, among the most noticeable Groupon, Twiiter and Facebook. In a way this five companies complement each other but are also potential competitors for the add business and in Groupon case, all of them are potential competitors  for the deals space, specially Facebook.

As I see it, the most valuable in order is Skype, which is a telecommunications company that can incorporate adds, promotions, their own handheld device, and is in itself a bit of a Facebook without the gossip part. LinkedIn is a Facebook but with  professional subscribers willing to make business and contacts and possibly willing to pay for it, so there is really a market niche as a social network that the others does not have. Facebook, has a very powerful window to sell advertisement, as long as is keep on the side without intruding to much on our social life,  we are all ok. They can make fantastic deals that will kill Groupon in a minute or ask for 30% of sales like iTunes does on some products like games. Groupon which for ever or until proven wrong all of us still wondering how they rejected the Google offer,  were first on the idea of deals and this gives them the advantage to negotiate with all other 3 companies and lead the deals department.  Twiiter, is wonderful but still do not get how  incorporte it, but is a keeper.

At the end it seems like we all wanted to be on a world wide social network, with close people which we could talk to, and with professional possibilities without having to expend to much on dinners!

The case for Apple Apps

It took me a little bit of time to really understand the app world, but after helping develop a Financial App with Bitmantra.com, I fully acknowledged not only the app world but how this little programs are shaping internet in a new and more "clean" way.

I want to analize 4 contributing factors to the app success. First,  tablet trends, defineltly unless you are using your computer for work, everybody else will eventually change the desktop for the tablet. This is in itself the perfect software for the perfect hardware.

Second, the search fever will be in declined and people will choose their preferences in the app form. Instead of having a webpage, everybody will have and app  and they will belong to an app directory as well.

Third, as more information is availble, we will prefer the compressed, better curated content, apps have.

Last but not least, Internet has evolved to a point in which most of us felt behind it, but if you turn to the app world not only will catch up but be ahead. Internet is becoming more like "Times Square add bazar", apps provide a cleaner way of contact with people, adds will be limited due to space and searching will be replaced by indexes or directories that will provide rankings and will leave unusefuls sites out.

I think the case has been made.!
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New York Times -Online Suscriptions

As you know, the New York Times started with its 20 articles maximum free readings, for the month, before charging a suscription. I do not see how to welcome the decision, even though I am a big fan and reader. They seem to be missing an important point,  internet is getting  revenue for adds, not suscribers, it is the new way media works, simple.  I do not see the point of paying for information I will get anyway. Some videos or certaing bloggers, which are really excellent,  I will not get, but in this fast pace information era, we tend to forget them fast.

Another thing call my attention this week,  when I reached the articles limit for this month and clicked on publicity,  I saw the Tiffany's add, the Marc Jacobs add,  or whatever add I clicked on. There is obvious some inconsistency in this situation, I can see and add but can not read the NY Times!

The NYT should be more creative in getting revenue. How  new companies are getting millions of users and revenue without having to charge subscribers: creativity.

Maybe it should  be treated like and app and forget internet, either you buy the app or not.  Think of a more affordable, better curated content, no publicity app. Or just leave it for free and get  paid for content distribution, why not eliminating the printed version during the week, get deals like Living Social or Groupon, make a big online store,  what ever idea comes to my mind seems more 2011 that charging online subscribers.

Next week, the NYT gives earnings for this quarter, we will see how the online readers are taking  this.

Twitter - 5 Year Anniversary

Twitter had its 5th yr anniversary.  Within the social media websites, I find this, the most useful, once you pass the  "learning curve" and adapt it to your necessities. One of the most valuable things, is being able to access some brains, on a one to one almost daily basis. For example Bill Gates, he twiits just once a week and what a twitt, always showing the best of human altruism, Jack Dorsey, very spontaneus and fresh, surprinsingly childlish. Bill Clinton, same as Bill Gates. Others , like  Brian Grazer,  just two twitts and sadly about partys, Dalai Lama needless to explain. I have followed many that had to unfollow because they use twitter as means of publicity,  are compulsive twitters or just do not say nothing. As this medium evolves many are "thinking before twiiting", having to say thoughts is 140 characters is challenging, but is  making people bring the best out of their brains..even if it does not look like it sometimes. As I twiit, I feel the responsibility of saying something of value in my field. Being able to choose who we hear, at this level, is a one in a lifetime opportunity people are having, As one friend will say "it makes me feel more intelligent and important!.."

Facebook IPO

Two questions come into my mind when I analyse the Facebook -need money to fund operation situation. The first one, what options do they have to fund their operation? and the second is how small investors do to get Facebook shares?. Both answers have been already answered: if you have more than 250k maybe you can get a piece of the action before it goes public. The second, small investor will get the highest price when the IPO comes out. Facebook is leaving out the ones that made the site extra-popular: the common investor. Neither Goldman Sachs or JP Morgan has a page on facebook, and I could not find James Dimon or Lloyd C. Blankfein either. If Facebook needs funding what will be the happy medium for them and for us the users? [I don't think GS or JPM have a happy medium in this situation]. Maybe allocate the IPO to small investors that have accounts with broker dealers before the offering comes out, the same allocations big brokers will give  big clients,  this will give the opportunity and time to anyone to participate. I think this is the happy medium!

Groupon

I was seeing the interview, Charlie Rose made to Groupon CEO Andrew Mason on December 2010 after Google offered 6 Billion to buy the company. He does not confirm or deny the bid or even looked surprised with the event!. They announced the IPO that would price the company at 15 billion by the end of this year. They have a business model, but how are they going to be different from their competitors?
I get 4 emails everyday for the area I live and they all look the same: LivingSocial, UrbanDaddy, Gilt City, Jetsetter. They existed before Groupon got here. In the interview he mentions "we want to make a company that changes the world", it can be done, certainly, but changing the world by reaching just upper income households, hmmm.
Groupon has to set itself apart. I have a couple of ideas of how they can make a "blue ocean", in which they really reach all types of income with hefty discounts worldwide, that will be changing the way people buy and living up to his statement.