News that Groupon Inc. (NASDAQ: GRPN) completed the acquisition of website Savored.com has so far been met by investor selling. Savored is a provider of reservations at ‘the best’ restaurants across the United States, so it obviously is a competing interest of OpenTable Inc. (NASDAQ: OPEN). It is important to know that the financial terms of the deal were not disclosed.
It is also important to know that OpenTable Inc. (NASDAQ: OPEN) is only down by 1.6% at $44.41 versus a drop of 2.5% to $5.14 for Groupon.
If you will recall, it was just last week that Groupon said it was launching a mobile payments effort that obviously is aimed at Square and what will likely be a whole field of mobile payment processing efforts.
What Groupon’s acquisition today has in common with the deal last week is one of the same things that it is something true of Groupon as well. That is simply that there are no barriers to entry. Very little can be done on the patent front to protect these efforts and the winners will be the outfits which can win by gathering the most market share in the most profitable way.
Groupon’s market value is about $3.4 billion. As far as how today’s acquisition of Savored will matter, that remains to be seen.
Groupon’s release said, “More than 1,000 restaurants nationwide have used Savored’s unique platform for yield management. After booking a reservation on Savored.com and visiting the restaurant, diners enjoy up to a 40% discount applied automatically to their bill.”
Today’s news is good news in that Groupon is diversifying its business plan. That being said, it is diversification into another area where there is already traction and no serious advantage seems clear among any of the competitors.
JON C. OGG