BEST OF THE WEB: Has Groupon grown too fast?

Groupon is a fascinating company. In less than a few years it’s become the fastest growing tech company in the world – perhaps ever – and is now set to float on the New York Stock Exchange before the end of the year, perhaps even this month.

But there’s a lot of controversial history to this company, which now has over 5,000 employees, up from 300 two years ago. And Business Insider has done the hard yards, looking into why the company had so much trouble with regulators after its filing, its crumbling culture and accounting irregularities 

The story looks into a number of Groupon’s other problems, including the fact it has lost a number of key executives – due to what the story claims was a critical and fatal misunderstanding of the responsibilities involved.

Another massive issue is that the Securities and Exchange Commission had a number of things to say about Groupon’s IPO filing, including the way it calculated revenue. Some analysts were saying Groupon overstated just how easily it could become profitable.

“After reviewing Groupon’s S-1, the SEC asked Groupon to use net revenues going forward. Groupon complied in later filings… The revenue numbers went down, of course, and to the frustration of Groupon insiders, this created a whole new negative news cycle about the company.”

“Mason and Lefkofsky did not handle the bad press well.”

There were a number of key issues around the Google acquisition deal as well – anti-trust issues are key to why the deal didn’t go through. 

“Groupon’s board worried that the FTC would take nine to 18 months to review the merger, and that there was a very good chance it would kibosh the deal… So Google offered Groupon’s board an astounding $800 million break-up fee,” the report states.

There’s also a fascinating number of insights into the supposed $100 million acquisition of German site CityDeals whose founders Marc, Oliver and Alexander Samwer now own a significant chunk of Groupon stock.

But according to the report’s sources, “they are very shrewd, sharp elbowed guys”, who are running the company’s sales force with an iron fist.

“I think a lot of us who were enchanted by Andrew’s format of a combination of people and money and customer, were kind of turned off by The German Way. I think they really changed the internal happiness for the workplace.”

As a result, some sources say the Groupon sales team is becoming more like the Yellow Pages sales team, just growing bigger without any personality. And there’s a warning here for chief executive Andrew Mason:

“I think they play Andrew like a fucking violin,” one source stated, but Mason reportedly states that he takes a harsh view of the business as well.

“This is a job and you are supposed to work hard and what’s going on is maybe what you all needed to realise; that this is a huge opportunity for all of you people so you should be working hard.”

This is a massive piece, and goes a long way into capturing a snapshot of the tech industry’s latest IPO darling. But whether it will be able to shed these issues, and outperform when it floats by the end of the year, is anyone’s guess.

Every acquisition Google has made this year

Google makes plenty of acquisitions. Some of them, like Zagat and Motorola, are big enough that they have to disclose them to the market. But it also acquires plenty of tiny companies that it never has to reveal.

Fortunately, the tech industry has ears everywhere and can get information on what’s going on. This piece on The Atlantic examines every acquisition Google has made – most of them for start-ups – and a supposed purchase price.

Some of them are designed for end-users, like movie recommendation service FFlick, purchased for a reported $US10 million, while others such as Social Grapple are designed more as business tools.

If you want to take a look at where Google is heading lately with its acquisitions, you should definitely check this out.

Send your video viral

There’s been a huge emphasis over the past couple of years on making video, especially for businesses that want to improve their rankings. A lucky few are now striking it big with advertising revenue after their little video shoots across the internet, gaining millions of views.

This piece on the New York Times takes a look at why exactly that happens, and the steps an individual or business needs to take in order to create quality content.

“If your video is on the road to viral success, YouTube, a part of Google, is eager to make money from you. It will send you an email asking if you want to become a partner. If you give your permission, the site will run ads alongside your video and share more than half the revenue with you, sending you a cheque each month.”

“Some of the people behind viral videos, like the father of the boy coming down from dental anaesthesia in “David After Dentist,” have made more than $100,000 from YouTube ads.”

This piece is aimed at individuals looking to make it big, but there is good advice here for businesses wanting to push into video as well.

What can we expect in the Apple TV?

There’s a significant amount of evidence emerging that shows Apple is now working on a full-blown television set. But there are a significant amount of challenges the company will need to face if it ever wants to get one off the ground, and this new Mashable piece does a good job of explaining exactly why that is.

“How will it sell the Apple iTV? Direct is one obvious answer, but consumers still do a lot of TV shopping in bricks and mortar stores. Will Apple accept siting side-by-side with Sony, Samsung and Vizio at consumer electronics stores across the country?”

“Go into your local Best Buy and check out the Apple set up. It’s the only computer manufacturer with its own special area. That store real estate, though, is precious, and TVs are big, often much bigger than computers. Will Best Buy take an aisle or more just for Apple TVs?”

These are completely reasonable questions, and it’s interesting to wonder how Apple will jump those hurdles. Will it be able to do for television what it has already done for the smartphone and tablet market?