Online deals provider
Groupon Inc. (
recently announced that it has acquired Salt Lake City based
online retail manager CommerceInterface. However, the company did
not disclose the financial details of the transaction.
Founded in 2007, CommerceInterface's channel management
technology helps in aggregating goods from multiple vendors on an
e-commerce platform. Since April 2012, Groupon has been using the
technology for its Groupon Goods platform, through which
merchants post sales of different items that include diamond
jewellery, designer sun glasses, mattresses, computers and many
The acquisition of CommerceInterface is expected to better
Groupon's existing domestic e-commerce service going forward.
However, for 2013, we believe that the primary focus will be on
expanding the Groupon Goods platform in international markets. At
the end of the third quarter of 2012, Groupon Goods reached an
annual run rate of approximately $1.5 billion in global
The company also announced that post CommerceInterface
acquisition, its technology will be solely used by Groupon.
Currently, CommerceInterface serves a number of other merchants
who post their sales on different e-commerce websites such as
eBay Inc. (
Amazon.com Inc. (
Groupon is offering migration support to CommerceInterface's
current customers, who will have the option to shift to other
vendors over the next six months. We believe that the exclusivity
of CommerceInterface technology will provide competitive
advantage to Groupon over its peers going forward.
Groupon has been on an acquisition spree over the last 12
months. The company has acquired a number of start-ups such as
Breadcrumb, Uptake, Hyperpublic, Adku, and FeeFighters. These
acquisitions are expected to boost Groupon's position in the
small and medium-size business (SMB) market, apart from expanding
its technology and product portfolio.
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. We expect
these opportunities to continue to drive top-line growth going
Groupon enjoys a first-mover advantage in the daily deals
market based on its well-recognized discount coupons. However, we
believe that the market is getting more competitive due to the
growing interest from technology stalwarts such as Amazon and
Google Inc. (
Moreover, we believe that Groupon needs to post profits
consistently for the next couple of quarters to gain the
confidence of its jittery investors. Until that happens, we
prefer to remain Neutral on the stock over the long term.
Currently, Groupon has a Zacks #3 Rank (Hold).
AMAZON.COM INC (AMZN): Free Stock Analysis
EBAY INC (EBAY): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis
GROUPON INC (GRPN): Free Stock Analysis
To read this article on Zacks.com click here.