Company’s choice of a made up word was smart.
I’ve read a lot of posts and comments on domain blogs over the past couple week about Groupon while the company was considering a buyout offer from Google.
I don’t remember what I read where, but here is an amalgamation: it isn’t worth $6 billion (which it reportedly turned down), its technology is basic and easy to replicate, there’s little barrier to entry, and the name sucks compared to a good generic one.
I agree with some of this. It’s true the technology isn’t anything special. And there’s little barrier to entry. But you know what? This company is executing. It’s generating lots of cash. The one that I laugh at the most is the suggestion that, because it’s technology is nothing special, it’s not worth much. Some great businesses have basic technology.
But here’s the take-a-way I think is most important: Groupon.com was a better name choice than Coupon.com.
What??? Isn’t that heresy in domain investor circles to suggest that a “made up” name is better than a generic?
Perhaps. But by choosing the catchy (and meaningful) domain, Groupon:
1. Paid a lot less for a name than it otherwise may have. Now, the company still screwed up by launching without buying the Groupon.com domain name. It ended up paying six figures to buy it. But still, compare that to the outlay for something like Coupon.com or Deals.com.
2. Has a defensible brand name. If the company had been called Coupon.com (and there is such a site), it wouldn’t have any legal right to domains such as Coupons.com, eCoupon.com, iCoupon.com, NYCCoupon.com, etc. because of their generic nature. But the company does have plausible rights in anything with Groupon in it.
This is a perfect example of when launching a business on a made up domain (albeit with meaning) made much more sense than a “category killer” generic.