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.
Alan says
100% agree with you here.
Nic says
“But here’s the take-a-way I think is most important: Groupon.com was a better name choice than Coupon.com.”
YES, YES, and YES.
Steve M says
“… the company still screwed up by launching without buying the Groupon.com domain name.”
What domain did they use when they launched (i.e. began calling themselves “Groupon.”)
Andrew Allemann says
@ Steve M – I think it was like a subdomain. It was part of another company, so they subdomained it off the main company URL or something
rick says
Actually I completely disagree. Groupon, much like yahoo, amazon, etc is a company that is executing with a catchy name that they can identify with.
But to argue for a company to choose a catchy name vs a generic is smart is misleading. Diapers.com or lens.com would not even be in existence without their generic names. Its a pure business decision whether one should pay up for a generic in hopes of a successful business. But to infer that a catchy name had anything to do with thier success is ludicrous. They had a successful business plan which they executed on as you have stated. But if they had the generic, they would have replicated their success, if not increased it.
A simple fact— groupon is at least a 6 billion dollar company. But coupons.com (they own coupon.com) gets more traffic to their website according to compete.com.
Andrew Allemann says
@ Rick – what I’m inferring is that they would have not done better with Coupon.com.
Troy says
Ahh, someone using logic. Be careful, many domainers won’t appreciate that=)
John Doe says
Andrew, good post.
Rick, I think I get your point, but here is another question for you.
Company A and Company B are exactly the same with exception one being a generic domain name and the other with a unique domain name. It seems like history has taught us that the unique domain name overcomes overtime.
John
rick says
Andrew, if you used a regression model, I am sure that a generic would be positively correlated and statistically significant to the success of a business. Resellers, or domainers, would be negatively correlated.
I think u nailed the real issue which is that groupon’s success is due to a business plan that was successfully executed. Its just my argument that domainers (in general) can not replicate the success of amazon or groupon by owning a premium domain name.
But if coupons.com was owned by Andrew Mason, I would argue he would have built a larger empire.
Uzoma says
I believe it is really a false choice. Both can be equally successful. I agree with Andrew’s take, and rick’s philosophy, or principle. I had just finished debating Elliot today on these false choices presented to domainers. Like all fallacies, it’s couched by whoever is making the point, the proponents rely on their “authority” as pros, or domain veterans; but that is not sufficient to counter our lying eyes: Amazon, Xerox, Godaddy, ebay, Groupon, Yahoo, Google… and so on.
steve says
If you have the grandois to market anything than it doesn’t matter what name you use. Use louyupeon.com if you are that good. Comparing a brandable to a non brandable to me is moronic. Using a brandable they had a hire bar to clear and they did so. Now you are comparing a fully functioning huge business to a domain… Again, seems moronic.
John Humphrey says
Groupon used to be on a subdomain of ThePoint.com which still exists and I still think is a great idea- where people commit to a ’cause’ action, but only when a critical mass have signed on. But their users were talking about deals a lot so they launched Groupon. You can get the whole story from Andrew Warner’s Mixergy interview, http://mixergy.com/andrew-mason-groupon-interview or you can cut to the chase and just hear about how they got Groupon.com here: http://www.domainnoob.com/blog/2010/07/how-we-acquired-groupon-com/
Attila says
I just have one thing to say.
Look at all the brands made in the past 5, 10, 20, 30 or even 50 years ago. They’re all made up and they paid their dues by making their name heard and remembered through use of marketing campaigns.
If it wasn’t for the net, generics wouldn’t exist in the marketplace today. While a generic is still considered a brand, you will never go and say “You know, that Diapers company” …you will more likely say Diapers.com so the other person knows you’re talking about an internet site or company.
A generic domain is only worth something verbally when dot com is attached to it. Reading it in mainstream media, news websites or whatever, if there is no dot com attached to it, people just won’t know until they’re (consumer) ON THE WEBSITE.
Attila says
BTW, have a conversation about GroupOn and you don’t need add the dot com extension unless the person lives in a cave…
BFitz says
@ Rick
Try and deposit Coupons traffic counts in the bank, Groupon actually got a $6B offer.
@Andrew #3 is thier business model is a group buy, which is huge to the businesses they partner with. Many businesses who have done Groupon would have hung up on a sales rep from Coupon.com or Deals.com.
John says
Just goes to show that a name clearly isn’t everything…. It’s what you do with it. Development, marketing, strategy. Great domains will indeed make it a whole lot easier, in most cases, but without something unique, a good business model, etc… You could find yourself chasing your tail for quite sometime.
Larry says
When these discussions come up people always point to yahoo/ebay/amazon and google for that matter.
Those are BIG ideas and companies and there aren’t that many of those actually, right?
Those companies are where they are because of early free publicity on the net, venture capital and plenty of professional handlers and of course execution of the idea. Given the right execution, the right idea and enough money of course you can make a great business. (Actually if you weren’t around then the early publicity given to certain now successful net companies was pretty intense).
Anecdotally, a made up even goofy name seems to play better with the media and when it hits it hits big sometimes. Sometimes. As I think is well known most VC funded goofy name companies actually don’t work. Only some work. The others are merged, folded etc they don’t succeed and that is that whole model. Quietly generally.
But for other non-billion dollar ideas my opinion is that the domain name is much better. If you are selling phone service to business for example being phone.com is better then blahpho.com Although if you are selling to teens blahpho.com might be better though.
Kinesis says
I think the CEO of that company is a fool for turning down the $6B. I already see Yelp doing the same thing (I get Yelp coupons in my inbox).
Alan says
I personally think the founder is much smarter than many people are giving him credit for. At some point there is only so much money you need. With a 6B offer he can easily sell a portion of the company for several billion – enough cash out for 100 generations and see his vision come true. Money is a secondary object for most entreprenuers – the thrill to see your dream come true and influence masses is often much greater than earning another billion or two.
Its never black and white as people see.
Alvin says
All major companies rely on a catchy name , not a product name ; amazon , female warriors > eBay , digital harbor ? > Google , uhm…..
Thats why i registered CouPasa.com , like que pasa , maybe i’ll develop it for the spanish market , unless i can sell it for some dollars 😉