Why Are Tech Titans So Obsessed with the Online Deals Market?
12:28 pm, May 4th | by Hillary Reinsberg
It feels like every time you open your Internet browser or Twitter feed, another Internet giant has announced they’re entering the online deals space. From Zuckerberg to Page to Case, there’s been a weeks- and months-long boom in deals – and I believe it’s because tech industry scions, who want a hand in everything, are pushing the effort.
Are the leaders of Silicon Valley’s biggest and baddest trying to play catch up with runaway startup hits like Gilt Groupe and Groupon? Yes — definitely.
Let’s look at a few examples.
Take Larry Page, who recently resumed his post as CEO at Google. Since Page returned to the company, employees say Page has been absolutely obsessed with social platforms, so much so that Page issued a memo saying year-end bonuses would be tied – with an upwards or downwards margin of up to 25% – to employees’ performance in the social space. A few weeks later, Google announced its local deals business, Google Offers, which is a social group buying platform not unlike Groupon and others. It’s clear Page was the one who wanted in.
Speaking of Google, don’t forget they tried to buy Groupon for $6 billion last year. The startup turned them down.
Our buddy Jeff Bezos wanted in on the action too. Bezos sanctioned Amazon’s $175 million investment in Living Social, the direct competitor to Groupon. But then that wasn’t enough, apparently. Just yesterday, Amazon unveiled My Habit (which sounds like a rehab website, by the way), a daily fashion deals site.
Bezos wasn’t the only one in on Living Social. Last year, AOL founder and former CEO Steve Case threw tons of cash into the site and has promoted the company extensively on his Twitter feed. He told the Business Insider, “It’s a great space. Easy to attract customers in a predictable way. Living Social doing over $1 million in revenue a day, it really is win win win. Better than adwords, better than magazine ads. This brings customers into the store. Obvs. Not everyone coming back, but many will.”
Who are we forgetting? Oh right, Mark Zuckerberg! Never one to miss out on a party, Zuckerberg had Facebook launch a deals thingy of its own – Facebook Deals. It’s basically the same thing as the Google story, except on Facebook.
This is going to be a showdown!
While we’re at it, it’s also probably worth mentioning yesterday’s announcement that Vente Privée is moving into the United States. For the uninitiated, VP is a French company that does online fashion/retail deals, not unlike Gilt Groupe. Though it launched as a start-up run primarily by fashion types, it has been an unbelievable success. Its founder, the grungy, long-haired Jacques Antoine-Granjon, is worth billions. Now a mogul in his own right, he’s bringing his business to the U.S., where he now has a seed in the World Cup of tech moguls.
In both categories — sample sale-like flash fashion sites and local coupon sites — small startups undoubtedly pioneered the trend. Gilt Groupe, Ideeli, Groupon and the Euro edition of Vente-Privee all started as grassroots ideas. But once online discount buying got the reputation of the next big thing all the big guys wanted in. Possibly for the sake of becoming ubiquitous Internet magnates/dark lords of the world wide web, with hands in all pockets of the Internet world, but also…probably for the money.