It was happy to see Groupon finally went public on Friday after a month of delay. The initial public offering, which was priced at $20 the night before, soared 40 percent at the opening bell to hit $28. It shows a good sign for Groupon and other Internet companies waiting to go public. However, in Terry Lee’s Blog (https://blogs.ubc.ca/terrylee/2011/11/07/groupon-a-bubble/), the author commented that “the rise of the stock was mostly due to hype, and is a growing bubble, that is soon to pop” because of Groupon’s “lack of profit” in the long run and “risk of competitors”.  I do not agree with Terry’s points of view.

Groupon went public before LivingSocial or Facebook. From a marketing point of view, I think that being a pioneer to go public helps Groupon to raise its brand image and brand awareness among the public. It should not be a surprise to find consumer-facing websites attract more potential customers after going public. For example, LinkedIn’s growth accelerated after entering the public market this year.  Therefore, going public will be a major marketing boost for Groupon.

The competition within the e-commerce industry is really intense. Groupon faces competitions from its similar online buying companies, like LivingSocial. Also, as mentioned in Terry’s blog, Google appears as a threatening competitor to Groupon. Although, with a huge number of competitors, Groupon’s position as a market leader in the industry with 50% of total market shares makes it difficult to be defeated. Going public before its major rivals doing so further helps Groupon to horn its strong brand position and competitive advantage.  The main purpose for a business to use Groupon is as a marketing tool. Due to a recent slow down of economy, I believe that more and more small businesses with limited budget will choose Groupon as a platform to attract customers, rather than afford expensive marketing strategies offered by Google.