Online daily-deals provider
Groupon Inc. (
recently announced that it has completed the acquisition of
Korean e-Commerce provider Ticket Monster, popularly known as
TMon, for $260.0 million ($100.0 million in cash and $160.0
million in Class A stocks).
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Ticket Monster, a subsidiary of LivingSocial Korea Inc., was
acquired by Groupon, as announced on Nov 7, 2013. Post
acquisition, Groupon divested LivingSocial Korea's Malaysian
Mobile service offerings are increasingly becoming the key growth
catalyst for Groupon. The company is shifting toward providing a
mobile-based e-Commerce platform, which will help it to reduce
exposure to email-based daily deal transactions. In the third
quarter, direct email (Push) remained less than 40.0% of North
On the other hand, Groupon noted that in Sep 2013, approximately
6.0% of total traffic in North America was related to search
activity (Pull), with customers that search spending over 25.0%
more as compared to Push customers.
Groupon also noted that in Sep 2013, 75.0% of the North American
merchants opted to use Groupon's search-based platform. The
latest acquisition will help the company to solidify its position
in the mobile commerce market, which has significant growth
The acquisition will also provide Groupon significant traction in
the Korean market, one of the fastest growing e-Commerce markets
in the World. Moreover, it will help the company to penetrate the
emerging markets of Asia Pacific in the long run.
We believe that Groupon has adopted a prudent policy of making
strategic acquisitions. In Sep 2013, it acquired Blink which
provides same-day hotel booking service through its mobile app.
These acquisitions not only expand its product portfolio and
market share but also eliminate competition.
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. Moreover,
strong holiday season sales (billings up 30.0%) will boost
Groupon's upcoming quarterly results.
However, we believe that the market is becoming more competitive
due to the growing interest of technology stalwarts such as
. Moreover, a volatile macroeconomic environment and continued
investments to expand its merchant base are expected to impact
Currently, Groupon carries a Zacks Rank #3 (Hold).