Groupon, the pioneer of coupons online shares tank -72%. Is this Deal fatigue?

That's Andrew Mason. CEO Groupon.

It seems like Daily deal sites are taking a knock if Chicago-based Groupon is anything to go by. Groupon pioneered the online coupon business for small business owners and at the time, really created a stir. It replaced the traditional paper coupon with online advantage.

Perhaps now, consumers have deal fatigue. it was once billed as "the fastest growing company ever!" by Forbes....and it was....in reaching 1 billion in sales incredibly fast - well, not anymore.

Groupon, the onetime darling of the markets and online, floated in November at 20 usd a share. Today it's tanked down 72% at 5.55 usd with the nosedive starting on Tuesday and continuing. Analysts are slashing their share price forecasts. 

Its billings in the second quarter have fallen, its earnings are below forecast, active customers only growing by 3% at 38m, really little good news.

True, it's now profitable, turning a 100 m loss into a 28m profit. But it's a 4 billion business and a return of 28m on 4bn is considered to be barely generating a profit. 

And Groupon has itself to blame for creating a myriad of lookalikes like LivingSocial. Selling discount coupons to local businesses has become so competitive, margins are being reduced by the deal site from what was, an average of 50%.

CEO Andrew Mason played the Internet fool at the much hyped IPO last November, being photographed with a cat on his head, chugging beer at meetings - you know what I mean. Too cool for school. Forbes ran a story today titled, 'Groupon needs a new CEO now!'. And looking at his video, you know where they're coming from.

Of course, it and gamer Zynga, are suffering from a loss of market confidence following the Facebook debacle, but this seems to be more fundamental. 

Maybe, it's being suggested, people are just getting tired of deals giving 50% off your hair loss treatment, to ultimately find that it only applies if your birthday coincides with a full moon. In the Orion of Sagittarius. Or something.

Although I do know that some deal Irish sites, such as Grab One, are doing well.


Groupon also settled in April, an 8.5m usd lawsuit with people who claimed the expiry date on coupons were illegal. In October last, they had negative controversy over an accounting issue about the manner in which they dealt with their revenues.

Its valuation today is circa 3.6 billion usd, about half what it was offered by Google in 2010 and which it turned down. Yep, turned down 6 billion dollars.

What will happen here is that the online coupon business will consolidate and pretenders to the crown will evaporate - leaving a handful of good professional players.

One wonders if the pioneer of the business, will be one of them.

Olympic online data just in from BBC. 34 million unique viewers on their site alone. Astonishing numbers.

You don't think the world has changed? Have a look at the video highlights of the London games 1908. Don't you love the Ladies tennis?

I know were all finished with, what was to be fair, excellent Olympic games. And this is the last time I'll mention them.

However, the BBC have just released social data about how well their online business performed and it's not unreasonable to use it as a typical benchmark.

It covers 2 weeks when 34 million unique users, saw BBC coverage online. 34 million online visitors. Astonishing.

On their busiest day it delivered one quadrillion bytes of data (yeah, it's a lot) and that busiest day was when Brit, Bradley Wiggins (Tour de France winner and secret smoker) won gold on August 1st.

After the opening and closing ceremonies, the men's 100m final was most watched (Usain Bolt) both on and offline globally.

They keep referring to these Games as "the digital games" and these results show that's exactly what they were.

In one 24 hour period, the online BBC traffic was higher for them than the total hours online for the 2010 World Cup! They also looked at device usage and saw it was generally, PC's during the day, Mobile usage from 6pm and then Tablets took over from circa 9pm.

The other benefit of this of course, is that they introduced BBC online to a new audience whom might very well comeback. It's really a superb performance but clearly shows consumers preferring to watch/follow online. It's further proof of the domination of Social and all things digital.

According to NBC (whom you might remember really messed up and if not, go here http://streamabout.blogspot.ie/2012/07/nbc-olympics-and-way-brands-can-easily.html), these games were the most watched TV event in history as well. So online got its share too or you might say, online viewers made it the most watched TV event. 

According to Nielsen, 219 million people watched some part of the games in the US alone (a viewer they consider as someone who watches 6 minutes or more). The Superbowl by contrast, gets circa 100 million viewers.

The closing ceremony had 31m viewers.

Irish broadcaster RTE, hasn't got data yet but indicated, based on data usage, it had 3,500 online at one time to watch an event. Which seems to me incredibly low? Katie Taylor? Oh sorry, that's right, their server went down just before broadcast.

In Canada, each Canadian watched 21 hours on average. 

Of course all Press titles saw increases and generally an uplift in advertising.
But all in all, this was the watershed event for online viewing and for Social Media. There's no doubt about it that it made online an intuitive place to go and almost "normal".

It shows how well planned media can generate new traffic and sell more ads by using online effectively. People are prepared to go online and watch something if it's good and will do so in huge numbers.

Extraordinary numbers that will pale by the time we get to Rio.

Google starts Ad Campaign to promote its advertising being better than traditional media. And what does it use? Press. Irony of ironies.

Excuse this for being short but then, I can't make it any longer. It is what it is - 
Ironic.

Google takes out a press campaign to promote, advertising on Google - under the concept that they will deliver more targeted audiences. 

Who needs a haircut? People searching for one. Absolutely. Clever line.

Simply, the ad suggests, that with Google you reach only the people you want to reach as distinct from say, Press Advertising, which reaches everyone. In other words, Press advertising is a bit of a eh, waste of time they say.

Really?

But then they've just taken out a Press Ad to prove it? Oh dear. Proving the power of press.

But this is going to feature in Conference powerpoint presentations from newspaper publishers for years to come and I'm with them. Irony of ironies.

(And you'd wonder, why is Google advertising at all?)
I can hear my press friends laughing now.
So am I.

Huffington post Live launches. A revolution in online broadcasting and an earthquake for traditional broadcasters.

Huffington Post Live (owned by AOL), a news broadcasting service of online publisher The Huffington Post, went live today. And it did so without fanfare but caused an earthquake amongst broadcasters. That's a video of Arianna Huffington's vision from 2010 which today she achieved.

"People want to be part of a story...not just consuming".

Promising 12 hours of video a day, 5 days a week initially, it intends to open us news by allowing Social Media comment and webcam interactivity. in other words, getting your views on the news. It's not just a video platform but a platform for engagement.

Rather than run pre-roll advertising or indeed banners, it asked founding sponsors to pay between 3-5 million usd for a guaranteed mention once every 2 hours and Cadillac and Verizon took up the offer. It's unlikely too that normal "ad breaks" will apply as they intend to "disrupt" traditional broadcasting models. And who'd doubt them.

Using Google hangouts for live chats, the whole sense is very engaging and with 100 professionals on their crew, it's a substantial attempt at online broadcasting.

Jonah Peretti, the co-founder of The Huffington Post was quoted as saying:

A couple years ago, we were trying unsuccessfully to sell social advertising to a market that only wanted to buy banners but things have changed dramatically since then. Now many agencies and brands are refusing to buy banners, companies that rely on traditional display units are suffering, and budgets are shifting rapidly to social advertising. One of our board members, who was initially sceptical of our decision to not run banners, recently said that “social advertising will be the biggest media business since cable television.” 

The feed (streaming) is perfect as is the overall look and feel. Have a look at the future here http://live.huffingtonpost.com/r/live

It's a sensational breakthrough for news and publishing, never mind online publishing. You've possibly seen the birth today, of the world's biggest TV station although it's much much more than that. It's the world's biggest Social Media site too.

This has the potential to kill off traditional TV broadcasters as the audience migrates online and yet again, big broadcasters show no response. It is social Media Television (Twitter with moving pictures) exactly what a new generation want.

Time and time again we see large businesses who had it their own way for so long, ignore the web and just get eaten. What is this going to do to the TV audience? It's going to take their viewers globally, just like a Facebook.

Live video on demand.
It's here, it's extensive and it's a winner.

Facebook Shares fall and worse to come on the 16th. But do you know, they can use your photos if they wish? For free?

 

Facebook share price closed Friday at just under 22 usd, losing about half its market value since May (currently 47 billion valuation usd down from 104 billion).

It has been lower at 19.82 usd and it has been a lot higher, at 45 usd.

Far more worrying and what's not really well-known, is that there are a lot more shares to come onto the market, starting this week. Three pre-IPO Facebook shareholders will be "unlocked" and can trade their 6 billion usd (yes, 6 billion) worth of shares. 

It's the end of the first "lock in" period on August 16th and it's hard to see it doing anything except add further downward pressure on a share that's been besieged since May.

Over the next 4 months, 2 billion of Facebook shares (about 70% of their outstanding shares) will become saleable.They will also have to face a tax bill of up to 4 billion usd in the next few months for witholding tax.

Unlike what many expected (yours truly included), this has been a disastrous time for Facebook. Share price imploding, publicity about "fake" Facebook accounts, NASDAQ getting sued by disgruntled brokers, automated bots running on Facebook's PPC (pay per click) advertising, Twitter withdrawing from Facebook's Instagram...it goes on and on. The Facebook search function remains truly appalling by the way.

Facebook is beginning to look vulnerable and a lot of people who were hurt through losing money, have their claws out for them. This will continue to reflect itself in share price pressure. So I would expect serious damage coming soon from the markets.

However one worrying story that I picked up on Friday, and which seems to be doing the rounds, which I believe is not well known (although I'm told it is) is the photo posting permissions.

In other words, when you post a photo to Facebook, that photo belongs to Facebook to use at will. Here's what Facebook conditions say;

By posting User Content to any part of the Site, you automatically grant, and you represent and warrant that you have the right to grant, to the Company an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sub license) to use, copy, publicly perform, publicly display, reformat, translate, excerpt (in whole or in part) and distribute such User Content for any purpose on or in connection with the Site or the promotion thereof, to prepare derivative works of, or incorporate into other works, such User Content, and to grant and authorise sub licenses of the foregoing.

Or as an online Solicitor translates as;

In plain English, this means you’re giving up copyright control of your material. If you upload a photo to Facebook, they can sell copies of it without paying you a cent. If you write lengthy notes (or import your blog posts!), Facebook can turn them into a book, sell a million copies, and pay you nothing. This deserves careful consideration!

On legal site mycounsel.com;

You may be shocked to find out that once you post on these sites, that although you still “own” the photograph, you grant the social media sites a license to use your photograph any way they see fit for free AND you grant them the right to let others use your picture as well! This means that not only can Twitter, Twitpic and Facebook make money from the photograph or video (otherwise, a copyright violation), but these sites are making commercial gain by licensing these images, which contains the likeness of the person in the photo or video (otherwise, a violation of their “rights of publicity”).

Facebook

Under Facebook’s current terms (which can change at anytime), by posting your pictures and videos, you grant Facebook “a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any [IP] content that you post on or in connection with Facebook (“IP License”). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it.”  Beware of the words “transferable, sub-licensable, royalty-free, worldwide license.”  This means that Facebook can license your content to others for free without obtaining any other approval from you!  You should be aware that once your photos or videos are shared on Facebook, it could be impossible to delete them from Facebook, even if you delete the content or cancel your account (the content still remains on Facebook servers and they can keep backups)!  So, although you may be able to withdraw your consent to the use of photos on Facebook, you should also keep in mind that if you share your photos and videos with Facebook applications, those applications may have their own terms and conditions of how they use your creation!  You should read the fine print to make sure you are not agreeing to something that you don’t want to have happen.

So let's just say you're out for a night and meet a celebrity and take a pic, then post it (as you do). It seems they can use that. Or you're at The Zoo and take a picture of a three humped camel. They can use that. Or on holidays you shoot The Eiffel Tower? They can use that.

It looks like they can use any or all of your photos at will. Say for advertising (given that it's an industry that buys a lot of library photos) you see your baby daughter in an Ad without your permission. Happy?

Ad Agencies spend their lives searching for pics such as these as does every media organisation in the world and every corporate to illustrate brochures, annual reports, websites etc. What Facebook has done is to build the biggest picture library in the world using your pics - and you don't know it.

So your pics can now be used in advertising material and there's nothing you can do about it. Or so it would seem.

By the way, I looked at Twitters T&C's and they look the same to me....

Shocking?

Outrageous?

Facebook needs to clarify this position as the Social Media comments increases.
And soon.