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Groupon on Buying Spree - Analyst Blog
1/18/2013 10:40:00 AM
Reportedly, online deals provider Groupon Inc. ( GRPN ) has acquired Mountain View, California-based Glassmap for an undisclosed amount. Glassmap's technology enables smartphone users to share their current location on a real-time basis with family and friends.
Moreover, the application provides relevant information and events taking place near the users' location based on users' newsfeeds from Facebook ( FB ), Instagram, and Twitter. The Glassmap technology is expected to complement with Groupon's own Groupon Now service, which provides local offers based on the consumer's location.
Groupon has been on an acquisition spree over the last 12 months. The company has acquired a number of start-ups such as CommerceInterface, 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 forward.
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.com ( AMZN ) and Google.
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 Rank #3 (Hold).
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