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by MediaBehavior
5490 days ago
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How much skepticism will need to be raised before investors are deterred from funding "a possible bonanza"? I also wonder how much Groupon is riding high based on the reasoning, "Well, if _Google_ thought highly enough of it..." (forgetting that Google was willing to bet on it _on_condition_ that Google had control/oversight of the operation) |
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"To demonstrate the economics of our business model, we have compared the revenue and gross profit generated from the North American subscribers we acquired in the second quarter of 2010, which we refer to as our Q2 2010 cohort, to the online marketing expenses incurred to acquire such subscribers. The Q2 2010 cohort is illustrative of trends we have seen among our North American subscriber base. The Q2 2010 cohort included 3.7 million subscribers that we initially spent $18.0 million in online marketing to acquire in the second quarter of 2010. In that quarter, we generated $29.8 million in revenue and $12.8 million in gross profit from the sale of approximately 1.2 million Groupons to these subscribers. Through March 31, 2011, we generated an aggregate of $145.3 million in revenue and $61.7 million in gross profit from the sale of approximately 6.3 million Groupons to the Q2 2010 cohort. In summary, we spent $18.0 million in online marketing expense to acquire subscribers in the Q2 2010 cohort and generated $61.7 million in gross profit from this group of subscribers over four quarters."
A typical cohort that returned >3x what it cost? Sounds like a good business to me.