The Once and Future Groupon

Another day, another deal. Groupon has walked away from a reported $6 billion acquisition deal with Google that according to Bloomberg's sources, the founders felt " would sap employee morale and alienate business clients." While Groupon representatives did not respond to our e-mail request for more details on the matter, the mention of company morale speaks volumes. There are two types of entrepreneurs: the kind who thrive on the excitement of building, scaling and then flipping projects, and the kind who just like to be their own bosses. Andrew Mason appears to be the latter, and we at mbStartups respect that. But we're a a little disappointed - not to mention jealous - and we're not alone. In 1998 Rebound Media founder Jeff Pundyk started an e-commerce group buying site called Zwirl, an open marketplace similar to eBay where people could start groups to encourage sellers to offer volume discounts. He and his partners had left the corporate environment of the technology trade publishing industry to cash in on the dot-com bubble before it burst. Unfortunately, their business ran out of money before social media, and an inflated valuation like Groupon's, could have made them rich. In a postmortem on Mediapost, Pundyk wrote: I look at Groupon's success with a mix of envy and pride. Somewhere in its story is a little bit of validation of ours. I was recently looking at some notes I made near the end of the Zwirl days. This bit, from November, 2000, is worth dusting off: "It seems obvious that the models and technologies that have come out of this period of heated innovation are transitional. The majority of the companies may disappear, but the innovations will be absorbed into service of an evolving economy. Chalk the whole thing up to a massive publicly and privately funded R&D effort that will bear fruit." The fruit we were hoping for was more like a fruit salad in which content, commerce, community and coupons work together to localize and globalize the economy in a way that benefits everyone. In July, for example, when Groupon teamed with McClatchy, it seemed natural for a print media and a new media company to join forces and give readers a new version of something they've always liked: local news and Sunday ads. For publishers that struggle to find the right balance between advertising dollars and subscription revenue, the ability to reach out to local merchants with an advertising package that uses a simple template and has no upfront costs must have sounded, to paraphrase David Pogue, elevator simple. Fortunately, that idea had legs. Today Adility, the developer of a new location-based advertising platform for retail merchants has announced its partnership with NimbleCommerce, the white-label group-buying platform behind OpenTable,ValPak, Yellowpages.com, Philadelphia Inquirer's Philly.com and AnnArbor.com. "NimbleCommerce has developed a first class enterprise platform for any large publisher who wants to quickly launch and, more importantly, scale their local commerce business," said Thomas Cornelius, CEO and founder of Adility in a statement. "This partnership will give our merchant base increased reach and volume with access to marque publishers who sell using the NimbleCommerce platform." "Adility provides a critical component for publishers seeking to enter the local commerce space - direct access to the thousands of deals being created by local merchants every day," said Prashant Nedungadi, CEO and Founder of NimbleCommerce. "Their integration with NimbleCommerce gives our clients immediate access to a rich source of deal inventory and quickly scale their local commerce business." Groupon might be a free agent, but so is its business model. We wish them luck, and look forward to tomorrow's deal.

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The Once and Future Groupon

Devon Glenn

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Devon Glenn