Groupon Inc. (
recently announced that it has acquired Blink, which provides
same-day hotel booking service through its mobile app. Based in
Madrid, Spain, Blink has partnerships with approximately 2,000
hotel owners in eight European countries.
Blink will be integrated within Groupon's Getaways travel
business that the company launched in 2011. Groupon's service
works with hotels and other partners to provide travel deals in
48 countries. The addition of Blink is expected to boost
Groupon's European travel business going forward.
Mobile service offerings are increasingly becoming the key growth
catalyst for Groupon. The latest acquisition will help the
company to solidify its position in a market, which has
significant growth potential.
Smartphones are playing a key role in travel purchases,
especially in case of last minute bookings. eMarketer expects
smartphone travel researchers in the U.S. to grow to 50 million
or 40% of all digital travel researchers this year, with total
U.S. mobile travel sales touching $13.6 billion.
We believe that Groupon has adopted a prudent policy of making
strategic acquisitions. These acquisitions not only expand its
product portfolio and market share but also eliminate
competition. Groupon is also forging partnerships to boost its
penetration. In August, the company extended its 3-year
partnership with Fiksu, which will allow the latter to
exclusively market Groupon's mobile applications worldwide.
Groupon's increasing focus on delivering mobile service offerings
significantly boosted traffic. This is evident from the fact that
50.0% of the transactions in North America were through mobile
devices, up from 30% in the year-ago quarter. Additionally, more
than 7.5 million people downloaded Groupon's mobile apps during
the quarter, which led to robust growth in the mobile business.
We believe that Groupon is well positioned to gain from rising
e-commerce spending on mobile devices, a profitable domestic
market and an under-penetrated international market. However, we
believe that the market is becoming more competitive due to the
growing interest of technology stalwarts such as
Groupon carries a Zacks Rank #3 (Hold).
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