Boston, MA 01/06/2013 (wallstreetpr) – Groupon Inc (NASDAQ:GRPN) last week closed its $260 million acquisition of TicketMonster, a subsidiary of LivingSocial Korea. When reports about this purchase first surfaced, investors were left wondering – what value TicketMonster, which was losing tens of millions of dollars every year, would add to Groupon?
It was good that investors question the sanity of Groupon Inc (NASDAQ:GRPN)’s management over the purchase of TicketMonster. However, answers to these questions have now been found and here we look at some of them.
First and foremost, it is important that as a deals company, Groupon Inc (NASDAQ:GRPN) needs to expand its customer acquisition and optimization of deals. Over the past year, the company has made efforts at optimization. It has brought in more merchants to its network, expanded the variety of its offering and introduced its own goods.
Where TicketMonster comes in
TicketMonster is strategic to Groupon Inc (NASDAQ:GRPN)’s growth at this time, when it is able to optimize its offering. We find that TicketMonster has significant presence in mobile deals. This is one area that Groupon Inc (NASDAQ:GRPN) has seen growing in its operations. As of September last year, the company realized 50 percent of its transactions through mobile and about 40 percent of international transactions came through mobile. It thus means that TicketMonster has the potential of helping mobile segment of Groupon Inc (NASDAQ:GRPN) to grow even faster.
We also see that TicketMonster offers a better opportunity for Groupon Inc (NASDAQ:GRPN)’s another overseas market landing. Perhaps it should be recalled that South Korea where TicketMonster has its base and firm grip on online deals is the fifteenth largest economy. This is a very promising market for Groupon.
Own products
There is no denying that Groupon Inc (NASDAQ:GRPN) seeking to be like Amazon.com Inc (NASDAQ:AMZN). This means that it wants to become the leading name in online deals. Like Amazon, Groupon Inc (NASDAQ:GRPN) has started offering its own products alongside those from merchants. This is something that TicketMonster is already having a hand in, so joining Groupon Inc (NASDAQ:GRPN) will add value in this segment.
Direct sale of own products allows the company to keep all the profits and also has potential for a long-term revenue stream.
