Technology

The business and culture of our digital lives,
from the L.A. Times

Category: Groupon

What if solar storms knocked out the Internet?

 

The likelihood is remote, but there's a chance that a solar flare like the one that disrupted the Earth's electromagnetic field Tuesday could be responsible for the temporary demise of the Internet -- or at least your ability to access it.

Don't believe us? Well, in 1989 electrical ground currents created by another solar storm made their way into the power grid of the Hydro-Quebec Power Authority, causing 6 million people to lose electricity. Elevators stopped working. Office buildings went dark. Engineers in Northern America were worried the blackout could travel down the Eastern Seaboard, although that never came to pass.

The U.S. government has since invested in research that has improved the design of electrical systems to make them less vulnerable to the effects of a solar storm. Still, we thought it was an interesting exercise to imagine what would happen if we were forced to live for a few hours, days or even weeks in a world without Internet.

Here are our top five predictions.

1. Self-promotion would become gauche again. Somewhere along our journey to total digital dependence -- maybe around 2007 or 2008 -- we accepted, as a society, that when it came to managing our Internet persona, it was clearly self-promote or perish. Did your kid do well on the SATs? Tell your 256 friends on Facebook all about it. Got a new project going at work? Tweet it loud and proud. Got a big story dropping in Vanity Fair? Email everyone in your address list. But in a world without Internet, where you have to look someone in the face while bragging, all this 'look how great I am' stuff might start to feel weird again.

2. Remembering who directed a movie would be a major project. Instant access to information through Wikipedia, IMDB and even Google has made it weirdly easy to answer any pop culture question that occurs to us at absolutely any time. If the 1986 film "Labyrinth" came up at Christmas dinner, you could figure out who directed it with just a few taps on a smartphone. But in a world without Internet, that same question could keep you guessing, or arguing, all night long.

3. Deal hunting would become a sport again. We are drowning in a daily deluge of deals. Gilt Groupe, HauteLook, Groupon, Blackboard Eats -- those are just a handful of sites that entice Internet users to save money by spending money on fancy local restaurants, Juicy Couture clothes, pricey sunglasses and spa treatments. But in a world without Internet, knowing which nail salon was giving 50 percent off a mani-pedi would take actual leg work. You'd have to really want it to find it.

4. Collecting would take effort. In today's world, deciding to start a collection of Art Deco jewelry, or mid-century pottery, or tea pots, or door knobs or Persian rugs with animals in the design is as simple as going on EBay and forking over cash. But in a world without Internet these collector gems could be found only by combing through Goodwills and tag sales. Stinky, time consuming and frequently unrewarding work.

5. You'd hear a lot fewer Apple rumors. In an online news cycle that demands constant updating, unsubstantiated rumors that Apple's next iPad might have better resolution than its last iPad is considered a major news story. In a world in which we had to typeset our stories by hand, pay for the paper they were printed on and the ink that they were printed with, well...you'd probably hear only about one Apple rumor a week.

ALSO:

Solar storms may cause dropped calls on cellphones

Apple reports record sales of iPhones, iPads and Macs

Google plans to merge more user data across its products

-- Deborah Netburn


Google Offers debuts in L.A. with Grauman's movie tickets deal

GraumanGoogle Offers, the Internet search giant's daily deals site, launched in Los Angeles and four other markets.

For its first deal in Los Angeles, Google is offering two movie tickets and a large popcorn at Grauman's Chinese Theatre or Chinese 6 Theatres in Hollywood -- up to a $39 value -- for $14.

Google Offers launched in June in Portland, Ore., and has since expanded to markets such as San Francisco, San Diego, New York City, Boston and Washington. Like other daily deals sites, Google Offers will target users with limited-time-only deals based on their stated interests, with discounts of 50% or more.  

The daily deals market is crowded, with services such as Groupon, LivingSocial and AmazonLocal bombarding users' inboxes with discounts for yoga classes, sushi dinners, teeth-whitening treatments and spa packages. 

Despite the competition, which some analysts have said is already too stiff, Google Offers plans to outperform its rivals by integrating deals throughout its other products, said Eric Rosenblum, director of product management for Google Offers. The company also seeks to improve personalization of the offers it sends to subscribers, increasing the chances that they will buy the deals.  

"Consumers want more relevant deals; it's certainly obvious, but it's hard to do," Rosenblum said. "We think we're going to have a lot more deal density and more relevance."

Wednesday's movie tickets and popcorn offer is the first daily deal ever made for Grauman’s Chinese Theatre and Chinese 6 Theatres, said Alwyn Hight Kushner, director of operations for Chinese Theatres. She said the company had discussed the possibility of doing a daily deal with other services, but ultimately chose to go with Google because it's "a big trusted brand and big household name."

"We like the idea of being the first in Los Angeles with Google as opposed to being one of 100 deals this week" with a rival site, she said. "It's great exposure for our business."

In addition to Los Angeles, Google Offers became available Wednesday in Atlanta, Brooklyn, N.Y., Chicago and Houston.

To subscribe to Google Offers, consumers can visit www.google.com/offers and sign in with their Google accounts.

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Google+ now open for businesses

Groupon IPO: highest tech valuation since Google

A tour of Google's funky new Los Angeles office

-- Andrea Chang

Photo: Grauman's Chinese Theatre in Hollywood. Credit: Luis Sinco / Los Angeles Times

Groupon IPO: highest tech valuation since Google

Groupon

Groupon's initial public offering is on at $20 per share, to give the Chicago daily deals site a valuation of $12.7 billion.

That's the highest tech valuation since Google went public in 2004 at a valuation of $23.1 billion, according to the San Jose Mercury News. So, can Groupon be the next tech industry giant that Google has grown to be?

Groupon seems to think so, issuing about 35 million shares on Friday that will sell for more than "the initially projected range of $16 to $18, as demand materialized despite lingering concerns about Groupon's accounting and business model," noted Times reporter Walter Hamilton in a story he wrote about the company's IPO.

The daily deals site will trade on Nasdaq under the symbol "GRPN." Groupon's chief executive, Andrew Mason, was in New York on Friday to ring Nasdaq's opening bell.

The Chicago Tribune's editorial board wrote that Groupon's IPO will help change Chicago's reputation "for a city with, at best, a mixed reputation as a hub of business innovation."

"Can it really be just three years ago that Northwestern University grad Andrew Mason and his gutsy financial backers launched their daily deal site, spawning a new industry?" the Tribune asked. "Can it really be that Groupon expanded from 37 employees in late 2009 to more than 10,000 today? It's an amazing business story."

It's also a business story that has left many investors questioning whether or not Groupon has a sustainable business model.

"There's fear — perhaps smugness on the part of rivals — that the company is a flash in the pan, too easily imitated and failing to pay off for its advertisers," the Tribune wrote. "Missteps in reporting its financial results have raised legitimate questions. The answers haven't always been satisfactory."

Currently, Groupon operates in 35 countries, with more than 3,000 employees and expected annual revenue of $500 million this year. The company is said to have turned its first profit after just seven months in business and makes its money by taking a 50% cut of each discount coupon it sells through its website.

In early trading on Friday, shares of Groupon rose nearly 50% to about $27.71 per share.

ALSO:

LinkedIn third-quarter loss disappoints investors

LivingSocial reportedly preparing for $1-billion IPO

Technology bubble? 'We don't think there is,' says Marc Andreessen

-- Nathan Olivarez-Giles

twitter.com/nateog

Photos: Entrance to Groupon's headquarters in Chicago. Credit: Tim Boyle/Bloomberg

LinkedIn third-quarter loss disappoints investors

LinkedIn

LinkedIn recorded its first quarterly loss since the online professional network's initial public offering in May.

The loss wasn't as steep as some analysts had predicted, but the stock fell as much as 8% in after-hours trading. It came as the company increased spending on research and development to attract more users around the globe.

LinkedIn lost $1.6 million, or 2 cents a share. It had earnings of $4 million, or 2 cents, in the third quarter of 2010. If not for certain items, LinkedIn said it would have earned 6 cents a share. Revenue more than doubled from last year to $139.5 million, more than the $128 million analysts had forecast.

Total operating costs more than doubled to $134.9 million as LinkedIn opened an office in Tokyo and bought IndexTank to improve search on its site.

This is an especially important quarter for LinkedIn because employees and other insiders can begin selling their shares starting Nov. 21. Investors may be nervous that the end of the lockup will usher in a tidal wave of sales that could cause the stock to drop.

LinkedIn made its hotly anticipated public trading debut before the economic turbulence that has delayed the IPOs of other Silicon Valley companies such as social gaming company Zynga. As such, it's a bellwether for the sector. Groupon, the daily deals company, is set to price one of the year's most closely watched IPOs on Thursday.

LinkedIn maintained its pace of adding about two new members a second, finishing the quarter with 131.2 million members. It continues to trade at about twice the $45 price it fetched at its IPO. It also hosted a town hall meeting on jobs with President Obama last month.

LinkedIn said Thursday that it has filed a registration statement with the SEC to sell more stock. The company said it planned to use the proceeds for "working capital and general corporate purposes." 

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LinkedIn earnings beat expectations

LinkedIn preparing for an IPO

Business card? He has your profile

-- Jessica Guynn

Photo: LinkedIn founder Reid Hoffman, center, and CEO Jeff Weiner, right, applaud after the opening bell at the Big Board as the company goes public. Credit: Mike Segar / Reuters

Trouble for tech in market sell-off

Ripgoodtimes The double-whammy of the S&P downgrade of U.S. government debt and double-dip recession fears is turning into a real downer for tech stocks.

The Nasdaq fell nearly 7% on Monday, even peeling some of the glow from Wall Street darling Apple.

But few tech companies have been as hit as hard as LinkedIn in the market sell-off. The first major U.S. social networking company to go public beat analysts' estimates for second-quarter earnings last week. But the stock fell more than 17% in trading Monday.

LinkedIn was not alone. Other tech companies that recently went public also fell. Does that mean the initial public offering window for tech companies could slam shut again as investors look for safer bets?

"I don't think anyone has a good answer on that yet, it's too raw and too new,” Deutsche Bank communications technology analyst Jonathan Goldberg told VentureBeat. "In general, market conditions are going to make it hard for any IPO to come out."

That could spell trouble for social gaming company Zynga and daily deals website Groupon, both of which have filed to go public. It could also postpone IPOs from other prominent players such as Yelp.

That, in turn, could have a chilling effect on the tech boom in Silicon Valley that has seen investors throw billions at start-ups.

Could another global meltdown trigger a repeat of Sequoia Capital's 2008 "RIP Good Times" presentation? That's when the venture capital firm invited about 100 executives from its portfolio companies to give them a sobering overview of what the economic crisis meant for Silicon Valley and their start-up dreams.

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LinkedIn earnings beat expectations

Web 2.0: Rest in peace

-- Jessica Guynn

Image credit: Sequoia Capital

 

Federal scrutiny could stymie Groupon IPO

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Groupon's $750-million initial public offering might have to be delayed until late September because of questions from federal regulators over the financial data the group-buying coupon website has provided so far, according to a report from CNBC.

Groupon detailed a bit of its IPO plans in a June filing with the Securities and Exchange Commission and in the documents said, among other things, that its IPO would be made up of both new shares and shares belonging to current investors.

On Wednesday, "unnamed people" familiar with the SEC's standard review of the company's filings were "reporting that the process may take longer than usual for Groupon due to 'nonstandard financial measures' the daily coupon company used," CNBC said.

However, the financial news cable network also said that an analyst it spoke with said a September IPO wouldn't be abnormal as the SEC usually takes about 3 months to review such documents before a company issues public stock for the first time.

CNBC said that one of the accounting metrics it has been told the SEC is taking an extra look at is Groupon's gross profit.

"Used as a gauge of revenue, this is the amount Groupon keeps after giving a portion of each sale to its merchant partners," CNBC said. "But the figure excludes marketing and administrative costs, raising questions about its usefulness."

Officials from Groupon were unavailable for comment on Wednesday.

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Groupon files for a $750-million IPO

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Technology bubble? 'We don't think there is,' says Marc Andreessen

-- Nathan Olivarez-Giles

twitter.com/nateog

Photo: The Groupon logo is displayed on the company's website in Chicago on June 2, 2011. Credit: Scott Olson /Getty Images

LivingSocial reportedly preparing for $1-billion IPO

LivingSocial

LivingSocial is reportedly preparing to file for an initial public offering of stock that could seek to raise about $1 billion for the daily deals website.

The Washington, D.C., company has selected Bank of America Merrill Lynch, Deutsche Bank and JPMorgan Chase & Co. as its three underwriters for the IPO and have the valuation of the company set somewhere between $10 billion and $15 billion, according to CNBC, which first reported on the plans.

Andrew Weinstein, LivingSocial's head of communications, said "we don't comment on rumors or speculation" when asked about the validity of the reports.

The Wall Street Journal and New York Times said they've verified the CNBC story through unnamed sources.

Groupon, which also offers local deals online tied to specific cities, filed for an IPO of its own in June that is looking to raise $750 million. Groupon has said it operates in 175 North American markets and 43 countries and has about 83.1 million subscribers.

LivingSocial has said previously that its user base is made up of about 10 million subscribers in more than 120 markets and five countries.

In December, Amazon.com, the Web's largest retailer, invested $175 million in LivingSocial alongside an $8-million investment from Lightspeed Venture Partners of Menlo Park, Calif.

LivingSocial has yet to file an S-1 form, which would declare and detail its IPO plans, with the Securities and Exchange Commission.

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Groupon files for a $750-million IPO

LivingSocial scores $175-million investment from Amazon.com

LivingSocial creates frenzy by selling $20 Amazon gift cards for $10

-- Nathan Olivarez-Giles

twitter.com/nateog

Image: A screenshot of LivingSocial's website displays discounts for Los Angeles. Credit: LivingSocial

Groupon files for a $750-million IPO

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Groupon is going public and looking to raise about $750 million in its first stock sale.

The Chicago-based daily deals website disclosed its initial public offering plans in a filing with the Securities and Exchange Commission on Tuesday, noting that it would like its stock to trade under the symbol "GRPN."

In the SEC filing, Groupon said its IPO would be made up of both new shares and a yet-to-be-determined number of shares that belong to current investors in the company, which was founded in 2008 and already raised $950 million in funding in January.

The SEC filing also included a letter from Groupon's founder and chief executive, Andrew Mason, addressed to "potential stockholders."

In the letter, Mason said that while Groupon was "looking forward to being a public company, we intend to continue operating according to the long-term focused principles that have gotten us to this point," according to the Chicago Tribune.

While the IPO had been speculated on for a few months, the SEC filing also offered the first public details about Groupon's operations and finances.

From the Tribune report:

The company brought in $644.7 million in revenue in the first quarter of 2011 but posted a net loss of $147 million for the period. In 2010, revenue was $713 million, and the company recorded a net loss of $456 million.

The filing showed that Groupon has high operating expenses, particularly related to marketing and customer acquisition. The company spent $241.5 million in 2010 and $179.9 million in the first quarter of 2011 on online marketing related to getting new subscribers.

"We anticipate that our operating expenses will increase substantially in the foreseeable future as we continue to invest to increase our subscriber base, increase the number and variety of deals we offer each day, expand our marketing channels, expand our operations, hire additional employees and develop our technology platform," Groupon said.

Groupon did not specify in the filing when it was hoping to launch its IPO, but did say that its underwriters would be Goldman, Sachs & Co. and Morgan Stanley.

Morgan Stanley was among the underwriters for LinkedIn's recent IPO, which saw the social networking site's share price rise 109% to $94.25 a share during the first day of trading. LinkedIn shares have since calmed down a bit; trading at $78.63 as of 1:30 p.m. Thursday.

In the SEC filing, Groupon said that, as of March 31, it was operating in 175 North American markets and 43 countries with about 83.1 million subscribers. The firm also has grown to 7,107 employees now from 37 employees in June 2009, the filing said.

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Technology bubble? 'We don't think there is,' says Marc Andreessen

Lise Buyer, banker who guided Google IPO, talks about LinkedIn IPO

-- Nathan Olivarez-Giles

twitter.com/nateog

Photo: A street ad in Seoul touts Groupon deals for South Koreans. Credit: SeongJoon Cho / Bloomberg News

Technology bubble? 'We don't think there is,' says Marc Andreessen

Andreessen

Don't tell Marc Andreessen there's a bubble in Silicon Valley.

"We don't think there is," Andreessen said during an interview with Walt Mossberg and Kara Swisher at the All Things Digital Conference on Wednesday night.

Andreessen, 39, who helped invent the Netscape browser and now runs venture capital firm Andreessen Horowitz with his partner Ben Horowitz, reasons that bubbles tend to be a psychological phenomenon. He says all the angst about a bubble is reassuring and that he only gets frightened when other people get euphoric.

"If a very large number of people think there's a bubble, that makes us think there isn't  a bubble because a key characteristic of a bubble is that everyone thinks there is a bubble," he said.

Andreessen also analyzed the price-to-equity ratios of large technology companies, including Apple, Google, Cisco and Microsoft, which are trading at single-digit ratios, which he said suggests that the public markets are still scarred from the technology collapse a decade ago and are significantly undervaluing them.

"What that tells me is that the public market hates technology," he said.

So what then of LinkedIn's hot initial public offering?

Andreessen, who's an angel investor in LinkedIn and a huge proponent of its business, had a number of explanations: It had a thin float. Investors are hungry for a growth story. LinkedIn founder and Chairman Reid Hoffman is the best innovator in the industry. And even if you wanted to short the stock, you couldn't because you can't find shares to borrow.

Andreessen2 Besides, he said, "it's only one company," which if it created a bubble would make it the "first time in equity history we have a bubble that's affecting one stock."

But there are quite a few high-profile Internet companies –- namely Zynga –- that are lining up to make their own stock market debut. Their valuations have soared in private funding rounds and in trading on secondary markets. Aren't those companies trading at unreasonable multiples?

Andreessen, who has raised $1.3 billion for his venture capital firm to invest in promising young start-ups, says it's hard to draw any conclusions about what's going on in the secondary markets where demand greatly outweighs supply and many institutions as well as individuals can't invest. Besides, he said, LinkedIn fetched four times its price on the secondary markets when it went public.

He saved his favorite bubble argument for last: "Take all of the later-stage companies, all of their theoretical valuations, add them all up and collectively the whole universe is still worth less than Google."

Then he made a statement that seemed, if not bubbly, a bit fizzy. Chalking up the failure of start-ups to bad timing, he said: "Almost every dot-com idea from 1999 that failed will succeed."

Related:

Business card? He has your profile

LinkedIn's share prices more than doubles in IPO

Lise Buyer, banker who guided Google IPO, talks about LinkedIn IPO

-- Jessica Guynn

Photos: Marc Andreessen Photo credit: Asa Mathat / All Things D

 

GrouponLive: Groupon and Live Nation partner in discount concert ticket site

GrouponLive

Groupon and LiveNation rolled out GrouponLive on Monday, a new discount concert ticket website that is set to officially launch this summer.

The site is a joint venture between the two companies and will operate in the same way as already existing Groupon sites -- by offering discounts tied to a local area.

GrouponLive will sell tickets to Live Nation concerts, as well as for companies that sell tickets for concerts, sports, plays and other events through the Live Nation-owned Ticketmaster.

Times reporter Joe Flint, on our sister blog Company Town, reported the news of the teaming Monday morning:

The venture is yet another acknowledgement by Live Nation of the challenges facing the concert industry. Ticket sales have been struggling, and by partnering with Groupon, Live Nation will have another outlet to reach consumers. People generally use Groupon to find deals on tickets and restaurants.

Financial terms of the deal were not disclosed. Live Nation, based in Los Angeles, produces more than 20,000 shows a year for more than 2,000 artists. The company says it reaches about 200 million consumers a year through marketing related to its ventures.

Groupon, based in Chicago, offers its localized daily deals online in more than 500 markets worldwide.

The two companies said in a statement that Guy Oseary, an artist manager and event promoter who sits on Groupon's advisory board, was "instrumental in helping develop the partnership."

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-- Nathan Olivarez-Giles

twitter.com/nateog

Image: GrouponLive.com

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