Not only is their accounting on customer acquisition bogus, but how do they possibly value these customers? FTA:
Groupon's subscriber count -- the one Mason says it is spending aggressively to beef up -- now stands at 116 million, up from 83 million at the end of last quarter. Among those subscribers, 23 million have purchased a Groupon at least once.
So they have 116 million "customers," but less than 1 in 5 of those have ever actually purchased a deal?
Plus aren't Groupon's customers really the businesses paying for the Groupons, not the millions of subscribers to their e-mail list that apparently don't even purchase anything from Groupon? Seems to me that the "customers" they're referring to is really the product they're selling, and at a huge loss apparently.
No. The email subscribers are Groupon's customers - if you define "customer" as "where the money comes from".
Every day Groupon sends out a daily deal to their email subscribers. Some percent of those subscribers opt to purchase the deal and go to Groupon's website and pay with a credit card. That's where the money comes from. Groupon then distributes some of that money at a later date to the merchant offering the deal.
So their success is very much dependent on the size of their email list, because that is the maximum number of potential customers (payers). Zero subscribers means zero money. If all the merchants dropped out that subscriber list could still make money via affiliate or other partner revenue.
Groupon's subscriber count -- the one Mason says it is spending aggressively to beef up -- now stands at 116 million, up from 83 million at the end of last quarter. Among those subscribers, 23 million have purchased a Groupon at least once.
So they have 116 million "customers," but less than 1 in 5 of those have ever actually purchased a deal?
Plus aren't Groupon's customers really the businesses paying for the Groupons, not the millions of subscribers to their e-mail list that apparently don't even purchase anything from Groupon? Seems to me that the "customers" they're referring to is really the product they're selling, and at a huge loss apparently.