Technology Stocks

There Is A Trend To Spot In Groupon’s Growth Rate

What is different between Groupon and all the rest of the massive Internet sites that have been in the news lately? Why have they become one of the fastest-growing companies ever?

For the purpose of this discussion, set aside the fact that they are also massively unprofitable, a reality that they will get beaten up for in the upcoming IPO. It doesn’t change the evidence that the company’s revenue growth is phenomenal.

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Demand Media Also Under Monetized

Of late, I have given quite some thought to an opportunity that multiple Internet-based companies have missed. Most of these companies, with high traffic and equally high valuations, have clearly missed out on one of the most powerful monetization models: affiliates, especially revenue sharing. These companies prefer sponsorship and CPM advertising to percent of revenues. Online media company, Digital Media is another such player.

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Groupon Leads Adoption Of Revenue-Sharing Monetization Model

Where most online companies have been struggling to create a robust monetization model, Groupon has figured a way to leverage the Web to become an effective marketing tool for local businesses. Last week, they filed S-1, ending a much anticipated wait for their IPO. The issue is expected to raise $3 billion, pegging their valuation at $30 billion. Here is a review of the company’s strong performance in the past few months. Notable in their journey is the revenue sharing business model, a trend that I think will be major in the next incarnation of the web.

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Under-Monetized Facebook Dominates Display Ad Market

The comScore Ad Metrix report for the Q1 2011 U.S. online display advertising market reports that nearly 1.11 trillion display ads were served to U.S. Internet users during the quarter. The researcher estimates that the U.S. market currently has nearly 300 individual advertisers spending at least $1 million a quarter on display advertising. Social networking phenomenon Facebook led the market with 346 billion display ad impressions, accounting for 31.2% of the market, compared with a 16.2% share a year ago. Yahoo! sites came in a distant second with 112 billion impressions and 10.1% share followed by Microsoft sites’ 54 billion impressions or 4.8% share. Below is a graphic representation of the monthly movement of the display ad shares, courtesy of  The Wall Street Journal.

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International Expansion At Travel Sites

A survey conducted by AAA predicted that despite increasing gas prices, almost 35 million people traveled 50 miles or more over the Memorial Day long weekend. Even the Air Transport Association of America (ATA) estimates that an average of 2.24 million people will fly every day from June through August, which is an increase of 34,000 people over the year. The ATA also expects the current year to be a record-breaking summer for Americans going on international trips.

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LinkedIn IPO Is A Success, But Monetization Rate Is Far Too Low

The market is waiting for some big Internet IPOs to come out this year and next, with Facebook, Groupon, Twitter and the like expected to lead the brigade. However as it went to trade on the NYSE earlier this month, LinkedIn (NYSE:LNKD), the leading social network for professionals, became the first big U.S. social networking company to list. Its IPO is also being called the biggest Internet IPO since Google listed in 2004. Read the full article »

Concur Continues To Expand

Concur (NASDAQ:CNQR), a leading SaaS expense management vendor, is in the expansion mode. It recently acquired mobile trip manager TripIt for $120 million and followed this up with a strategic investment of $40 million in Indian travel portal Cleartrip. It has also announced the launch of Concur Japan and Concur India. Further, it joined the NetSuite (NYSE:N) SuiteCloud developer network. Let’s take a closer look. Read the full article »

Active Network: Long History Of Losses

A survey commissioned by the recently listed Active Network (NYSE: ACTV) revealed that 73% of U.S. households paid to participate in a recreational or community activity last year. That translates to $110 billion in registration spending incurred by 1.8 billion residents in the country. Read the full article »