Perhaps proving that it can’t compete with Google (NASDAQ:GOOG), Groupon has taken to suing two of its former employees who fled to the search engine giant. As is usual in these types of matters, Groupon has couched their lawsuit in terms of trade secrets: they allege that the two former employees, who were sales managers, took trade secrets with them to Google.
Google has developed its own local coupon initiative, dubbed Google Offers. Groupon has filed its S-1 with the SEC and plans to issue shares to the public on November 4th. The company has faced increasing criticism over the viability of its business model, the ease with which it can be copied by other, more well-capitalized companies (such as Google and Amazon.com (AMZN), and certain accounting maneuvers that have made Groupon’s results look more robust than they actually were.
Google holds $50 billion in current assets on its balance sheet, of which $42 billion is cash and cash equivalents, and Amazon has $11.2 billion in current assets, of which $$6.3 billion is cash and cash equivalents. One can easily conclude, then, that both companies have significantly more capital than Groupon with which to develop local coupon platforms. These companies’ other business lines throw off significant amounts of cash with which to subsidize the development of local coupon businesses, at Groupon’s expense.
Following is some information about these three companies:
- Groupon (GRPN): About the company: Groupon features a daily deal on the best stuff to do, see, eat, and buy in 43 countries. It has about 7,000 employees working across its Chicago headquarters, a growing office in Palo Alto, CA, local markets throughout North America and regional offices in Europe, Latin America, Asia, and around the world.
- Amazon.com, Inc. (NASDAQ:AMZN): The shares closed yesterday at $237.61 and have traded in a 52-week range of $156.77 to $246.71 and its market capitalization is $107.86 billion. About the company: Amazon.com, Inc. is an online retailer that offers a wide range of products. The Company’s products include books, music, videotapes, computers, electronics, home and garden, and numerous other products. Amazon offers personalized shopping services, Web-based credit card payment, and direct shipping to customers.
- Google, Inc. (NASDAQ:GOOG): The shares recently traded at $593.92, down $3.09, or 0.52%, on the day. The shares have traded in a 52-week range of $473.02 to $642.96 and its market capitalization is $191.77 billion. About the company: Google, Inc. is a global technology company that provides a web based search engine through its website. The Company offers a wide range of search options, including web, image, groups, directory, and news searches.
(Note: Selected financial data are sourced from Google Finance. All data are assumed to be accurate.)
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