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February 03 2012
motorola-xoom-tablet.jpeg (800×515)-2
Maybe it was too thick, maybe it was too heavy, maybe you just didn’t like Honeycomb. Regardless of your reasoning, you may want to keep your eyes peeled on your credit score if you bought and returned a Motorola Xoom between March and October 2011, because your personal information may be in someone else’s hands.
September 02 2011
landopad
Before the TouchPad dove head first into the bargain bin, HP tried a little pricing experiment. Early in August, they dropped the TouchPad's price by $50, and very shortly after, the discount was bumped up to $100. It was a sweet deal, but in retrospect, some buyers may not be too happy with pulling the trigger when they did. Woot sold the TouchPad for $379, but they reportedly feel like "scruffy nerf herders" about it and are offering buyers a $100 partial credit and an email laden with Star Wars jokes.
July 06 2010
Woot To The AP: Nice Story About Our Sale — You Now Owe Us $17.50
Gotta love those guys at Woot. They just sold to Amazon for $110 million, but that’s not stopping them from calling anyone out as they see fit. In this case, we particularly love it because they’re calling out the AP — and they’re doing so right on their highly trafficked homepage.
You see, Woot noticed that the AP covered the story of their sale five days ago. But in doing so, they also noticed that the AP used a number of quotes from CEO Matt Rutledge’s blog post about the sale. According to the AP’s own ridiculous rules for using quotations, Woot figures that the AP owes them $17.50.
The AP has been banned on TechCrunch for two years now because of this ridiculous rule. In fact, we’re breaking our own rule here by acknowledging they even exist. But this is too good to pass up — and it’s actually similar to something we did a couple years ago, trying to charge the AP $12.50 for their usage of quotes from us. To my knowledge, we’re still waiting for that check.
But Woot is more forgiving than we are. They’re willing to cut a deal:
But, hey. We’re all friends here. And invoicing is such a hassle in today’s paperless society, are we right? How about this: instead of cutting us a check for the web content you liberated from our site, all you’ll need to do is show us your email receipt from today’s two pack of Sennheiser MX400 In-Ear Headphones, and we’ll call it even.
Yes, Woot is letting the AP skip out on the money they owe if they simply buy a couple of the featured products today on Woot. Good idea. And they’re backing it up: “Don’t force us to pass this matter to a collection agency,” they write.
Best of luck with those jokesters, Woot.
Below, find the key blurb from Woot’s message to the AP, which hopefully they won’t charge us for since we don’t try to enforce the same ridiculous rules the AP does:
The AP, we can’t thank you enough for looking our way. You see, when we showed off our good news on Wednesday afternoon, we expected we’d get a little bit of attention. But when we found your little newsy thing you do, we couldn’t help but notice something important. And that something is this: you printed our web content in your article! The web content that came from our blog! Why, isn’t that the very thing you’ve previously told nu-media bloggers they’re not supposed to do?
So, The AP, here we are. Just to be fair about this, we’ve used your very own pricing scheme to calculate how much you owe us. By looking through the link above, and comparing your post with our original letter, we’ve figured you owe us roughly $17.50 for the content you borrowed from our blog post, which, by the way, we worked very very hard to create.
[thanks Anurag]
June 30 2010
Woot’s Deal Of The Day: Woot! — Amazon Buys It
Woot has been acquired by Amazon, as they briefly note on their blog today with a big “woot!” Well, okay, their exact words were “Holy crap!”
This is a great deal for daily online bargin service as, similar to Zappos and Audible, they’ll continue to be run autonomously under the Amazon banner. The company will remain in Texas. Terms of the deal have not been disclosed.
Woot shot to popularity with their “one deal per day” idea. Similar timed deal ideas have since become very popular for sites like Gilt (for fashion) and Groupon (for food and activities). The company also has always had an interesting sense of humor and has not shied away from having deals on things as diverse as handguns.
Update: Here’s the full letter from Woot CEO Matt Rutledge to employees:
Date: Weds, 30 June 2010
From: Matt Rutledge (CEO – Woot.com)
To: All Woot Employees
Subject: Woot and AmazonI know I say this every time I find a picture of an adorable kitten, but please set aside 20 minutes to carefully read this entire email. Today is a big day in Woot history. This morning, I woke up to find Jeff Bezos the Mighty had seized our magic sword. Using the Arthurian model as a corporate structure was something our CFO had warned against from the very beginning, but now that’s water under the bridge. What is important is that our company is on the verge of becoming a part of the Amazon.com dynasty. And our plans for Grail.Woot are on indefinite hold.
Over the next few days, you will probably read headlines that say “Matt Rutledge revealed to be monstrous pseudo-human creation of Jeff Bezos.” You might even see this photo making the rounds. Rest assured that these rumors have nothing to do with our final decision. We think now is the right time to join with Amazon because, quite simply, every company that becomes a subsidiary gets two free downloads until the end of July, and we very much need that new thing with Trent Reznor’s wife on our iPods.
Other than that, we plan to continue to run Woot the way we have always run Woot – with a wall of ideas and a dartboard. From a practical point of view, it will be as if we are simply adding one person to the organizational hierarchy, except that one person will just happen to be a billion-dollar company that could buy and sell each and every one of you like you were office furniture. Nevertheless, don’t worry that our culture will suddenly take a leap forward and become cutting-edge. We’re still going to be the same old bottom-feeders our customers and readers have come to know and love, and each and every one of their pre-written insult macros will still be just as valid in a week, two weeks, or even next year. For Woot, our vision remains the same: somehow earning a living on snarky commentary and junk.
We are excited about doing this for all sorts of reasons. One, our business model is so vague that there’s no way Amazon can possibly change what it is we’re truly doing: preparing the way for the rise of the Lava Men in 2012. Also, our deal means that Jason Toon will finally be released from that Mexican jail owned by Zappos honcho Tony Hsieh. No, don’t lie, Tony, we’ve seen the paperwork. And we need a powerful ally in case Steve Jobs finally breaks down and comes after us for all our Apple jokes over the years. Don’t think of it as a buyout; think of it as NATO!
I will go through each of the above points in more detail later, but first, let me get to the top 5 burning questions that I’m guessing many of you will have.
TOP 5 BURNING QUESTIONS:
Q: F1RST!!!!
A: Okay, that’s not a question, but it is a good place to mention that our forums will still be policed by a team of moderators, as before. And also, Woot’s previous and always-in-effect privacy policy will still be just as always-in-effect, so don’t worry, there are no plans to suddenly give up or merge your forum data.Q: Is Snapster leaving?
A: Are you kidding? He’s out the door about ten seconds after that check clea- that is to say, Snapster will continue as Woot.com CEO, just like before, and the rest of our staff’s not going anywhere either. Woot and all our various sites will continue to be an independently operated company full of horrible, useless products and an untalented jerkface writing staff, same as it ever was.Q: Will the Woot culture change?
A: Amazon is interested in us because they recognize the value of our people, our brand, and our unique style of deep-tissue, toxin-releasing massage. And they don’t want to start changing things now. Amazon’s hoping our nutty Woot steez continues to grow and develop (and perhaps even rubs off on them a little). They’re not looking to have their folks come in and run Woot unless we ask them to, which incidentally you can do by turning off the bathroom lights and saying the word “Kindle” three times; a helpful Amazon employee will appear in the mirror. That said, Amazon clearly knows what they’re doing in a lot of areas, so we’re geeked about the opportunities to tap into that knowledge and those resources, especially on the technology side. This is about making the Woot brand, culture, and business even stronger than it is today, and we expect that any changes will be for the better or we wouldn’t bother with this endless paperwork.Q: Where can I get one of those vuvuzelas?
A: Are you even paying attention?
Several months ago, when we were all sitting on Jeff Bezos’s bumper drinking orange Mad Dog and trying not to be noticed, we heard a voice in the distance yelling “You kids better not scratch my Mercedes or I’m calling the cops!” We ran. It was later that night when Amazon came by the house and said they liked our style and also wanted to get that money we owed them for messing up the chrome. We like to think that our relationship with Amazon will continue at this level for many, many, many years to come.
But we here at Woot are still a thoughtful company, so, at the end of the day, I watched the sunset, and its golden-hued glory made me think about two questions:1) Is there really a universal deity?
2) Does such a thing preclude free will or are we humans in control of our own destiny?
After spending a lot of time falling asleep at the library while facing the philosophy books, I determined that the concept of destiny is a construct that allows man a gentle release from facing the terror of his existence, and that a Hyundai full of twenties would pretty much offer the same benefits. And so, I ultimately said YES!
This is definitely an emotional day for me. The feelings I’m experiencing are similar to what I felt in college on graduation day: excitement about getting a check from my folks combined with nausea from a hellacious bender the night before. I remember fondly that time when an RA turned on the lights and yelled “WHO OWNS THESE PANTS?” Except this time, the pants are a company, and the RA is you, and the sixty five hours of community service is a deal that will ensure the Woot.com experience can continue to grow for years and years and years, like a black mold behind the Gold Box. Join us, because together, we can rule the galaxy as father and son. Also, there will be six muffins waiting in the company break room, courtesy of the nice folks at Amazon.com. Welcome to the family!
Matt Rutledge
CEO, Woot
May 02 2010
A TC Teardown: What Makes Groupon Tick
Editor’s note: Group buying sites are growing like mushrooms. In this teardown, guest author Steven Carpenter goes through a detailed teardown of the largest social commerce site, Groupon, and its competitors to see what exactly is going on here. Carpenter was the founder and CEO of Cake Financial, a TechCrunch40 Finalist that developed a service for mainstream investors to manage their investments, which was sold to E*Trade earlier this year. Before Cake, Steve worked in digital music managing strategy and the day-to-day operations for Rhapsody. He was also the director of business development at financial services startup myCFO, founded by Jim Clark and backed by Kleiner Perkins, and online photo site, Snapfish.
Much has been written about the rapid growth and success of Chicago-based local daily deal company, Groupon. And it is for good reason. No other startup has gone more quickly from launch to $1 billion+ in valuation except YouTube (12 months), which Groupon achieved in 16 months with its latest $135 million infusion two weeks ago. Just as unprecedented, the popularizer of the “group coupon” increased its valuation 4X in the span of just 3 months. What is going on here? Is Groupon yet another example of frothy venture capital valuations or is the company one of the next, enduring consumer Internet brands?
The Teardown
To find out, I did a teardown of Groupon’s business with data available on its website over the most recent quarter, compared my findings to what I calculated for the final three months of 2009, and then looked at how all of this compares to the top competitors. I conducted two analyses: 1) I looked at every deal across the Groupon network for a single day last November and a day this past April to see how revenue is scaling and how the company is benefiting from rapidly opening support for new cities. I then analyzed every deal listed on the Groupon website across 5 cities (San Francisco, Boston, St. Louis, San Diego, and Denver ) for all of Q4 2009 and Q1 2010 to determine how the company is growing once it enters a market and to see how the product mix is changing. The key finding is that Groupon is achieving considerable revenue growth across all measures: more customers, higher deal prices, and rapidly expanding markets.
How Groupon Makes Money
Groupon takes the old Entertainment Coupon Books that your mom used to buy and brings it to the social web. Groupon sells a “Deal of the Day” in each of it’s now 52 supported cities offering significant savings for local restaurants, service providers, activities and memberships, and takes a commission. The trick is that the deal is only “triggered” once enough people buy in. This creates the incentive to share the deal with friends and family, until “the deal is on.” It’s great for local businesses because they can set the parameters for the offer and they know a minimum for how many offers they will have sold in advance. By combining the social web and virality with hard-to-replicate deals, Groupon has created a network-effects business for commerce that makes its model highly attractive (hence, every week seems to bring new copycats).
Traffic
Groupon had nearly 3 million unique visitors in March, up from 900,000 in September. It is now bigger than Woot, in terms of traffic, and quickly approaching Zappos (5 million). According to Compete, Groupon gets more of its traffic from Facebook than any other site, including Google, and when people are searching they are typing “groupon”- meaning it is already enjoying the benefits of its brand equity as the company becomes synonymous with the category. As a result, Groupon is spending very little money on search engine marketing (as opposed to say Netflix or Amazon), which is a significant cost advantage. Leading direct competitor, LivingSocial, by contrast, flattened out at 900,000 but now appears to be ramping up again.
What Are People Buying?
Coupons for restaurants, massages, discounted memberships to fitness clubs and museums, local activities, tourist attractions, and merchandise continue to make up the bulk of what is being sold. You can tell a lot about a city by what is being bought on Groupon. To wit:
- Boston residents love laser hair removal (655 purchases), gliding around town on Segways (4,311), and learning how to fly a helicopter (2,575). Hopefully not all on the same day.
- St. Louis residents love their plants and garden supplies (6,106) and, of course, Llwelyn’s Pub (5,832)
- San Diegans are into Pole Dancing and unlimited carnival rides (3,875)
- Denver loves them some Cold Stone Creamery (7,110) and Speed Raceway (1,938)
- Atlanta is into NASCAR (1,063)
- Chicagoans enjoy the Tall Ships (7,119)
If you look at the top 10 deals by number of purchases, local merchants appear to be getting more comfortable with the Groupon marketing channel. Restaurant coupons will also be popular but offers like discounted clothing, flowers, house cleaning, and local events like boat shows are increasingly appearing on the site. As you can see below, between the fourth quarter of 2009 to first quarter of 2010, “Activities” replaced “Dining” as the #1 category and “Merchandise” took a big jump. My guess is that this will become more prevalent as Groupon increases its salesforce and these more local merchants begin to experiment with unique offers. Consumers will benefit as they have the opportunity to grab more of their favorite things at deep discounts.
How Big Is Groupon’s Business and How Fast Is It Growing?
On April 16, 2010, Groupon had 31 deals, 45,910 paying customers and sold nearly $1.3 million worth of coupons. This was a significant increase from the 17 deals, 10,018 customers and $240,000 in gross sales it had on November 6, 2009. Along every measurement I looked at—the number of deals /day, average customers/deal, average deal price, average gross revenue/deal—Groupon is seeing tremendous growth. Of particular importance is that its average deal price is increasing (from $24.65 to $44.94) and it is rapidly opening up new markets.
All of this is what is causing Groupon’s revenues to scale quickly. Assuming a 30% revenue share, Groupon netted $72,000, last November for a monthly run rate of close to $1.5 million, assuming 20 deal days each month. In April this had jumped 5X to $380,000, implying a monthly run rate of $7.6 million. As you can see from the chart below, not only is the number of deals increasing, but the number of customers per deal more than doubled and Groupon was able to elevate the price per deal. That formula of (more deals + more customers) X (higher ticket items) seems to be working.
Based on these numbers and the company’s growth rate, Groupon should easily surpass $150 million in revenues in 2010. And as revenue ramps, most of this will be pure profit since the company does not hold any physical inventory and its customer acquisition costs are so low.
How Is Groupon Doing Once It Gets Into A Market?
(Note: For some reason, there are not deals listed for every day but this seemed to be the case for both time periods, so we are looking at an apples-to-apples comparison. )
While there were nearly the identical number of deals during the two time periods (106 vs. 107), Groupon more than doubled its average gross revenues per sale from $23,000 to $47,000. The company doubled the average number of customers per deal from 874 to over 1,800 and increased the deal price from an overage of $27.20 in Q4 to $38.36 in Q1. I also thought it was interesting that the most purchased deal in Q1 was 7,119 (for a $16 ticket to ride the Tall Ships in Chicago), more than double the most popular sale in Q4 (2,918 for a $15 Vegetarian Dinner in Denver).
How Is The Rampant Competition Affecting Groupon?
Obviously I am not the only one running these numbers. Because of this dramatic growth and the wild profit potential of the emerging daily deals category, a number of companies are trying to become fast followers. You can see a comparison below of Groupon with its two most well-funded followers, LivingSocial and BuyWithMe (which recently brought on an experienced CEO in Cheryl Rosner, formerly CEO of TicketsNow and Hotels.com). Groupon has raised a total of $171 million to-date, employs more than 200 people, and serves 52 markets. Its next biggest competitor, LivingSocial, has raised $49 million, employs about 50 people, and serves 14 markets.
Of the companies the press likes to mention as competitors, the reality is that only LivingSocial has established enough traction to provide sufficient data to draw a comparison. LivingSocial is now in 14 markets compared to Groupon’s 52. I compared the daily deals for Groupon and LivingSocial for the same day as above, April 16.
As you can see below, LivingSocial looks a lot like Groupon did 6 months ago. LivingSocial had 10 deals compared to Groupon’s 31. On every measurement, total customers (45,910 vs. 5,976), average customers/deal (1,481 vs. 598), average deal price ($44.94 vs. $29.00), and average gross revenue per deal ($40,753 vs. $18,276), Groupon is far ahead. The data suggests that Groupon is not yet feeling the impact of all the new entrants.
The $1 Billion Question: Is This a Winner-Take All Market?
I think the potential for these kinds of offers on the web is a $5B+ opportunity. There is no reason to believe that this concept couldn’t be extended to virtually any category or service provider.
But I do not think this is a winner-take-all market like auctions were when eBay took that market.
There are no real technology advantages, there is nothing preventing a local vendor from using multiple platforms, and buyers don’t care where they buy so long as the deals are good.
That said, my take is that this is a winner-take-most market and looks more like search, where the bulk of the revenues will fall to the leader. There are definitely network effects in play and they appear to be stronger than I initially assumed. When Groupon enters a new market it is starting from scratch but it can leverage its significant investment in its platform. This is the reason it has raised so much capital and it is racing to get into new cities before the competition. The question remains whether fast followers like LivingSocial and BuyWithMe will be able to grow into mini-Groupons with Groupon already firmly entrenched in a city.
Bugatti teardown photo credit: Flickr/David Villarreal Fernández
January 20 2010
Facebook Beacon Done Right? Retailers Start Embracing Blippy.
Readers seem pretty split about what to think of Blippy, the service which allows you to share your credit card purchases online. About half think it’s the next logical step in sharing data online. The other half think it’s just about the worst idea ever. Retailers, it seems, are starting to lean towards the former.
Blipply has reached agreements with three partners to promote and use Blippy on their sites: Woot, Groupon, and Overstock.com. The latter is particularly interesting because as you may remember, Overstock.com was an initial Facebook Beacon partner — something which caused some controversy, and caused the company to pull away from Beacon. Now, they appear ready to revisit the idea.
Not that Beacon and Blippy are exactly the same. Beacon’s main problem was that it was opt-out rather than opt-in, which Blippy, as a service, is. But both at their core involve the sharing of purchasing data. And clearly from the get-go this has been an idea that intrigues retailers. After all, people sharing what they’re actually buying should pique the interests of others that may do the same. That was why many of them bought into the idea of Beacon.
But Facebook users felt they were being tricked into sharing this data, and worse, giving it over to Facebook to use for advertising purposes. Blippy, which makes it very clear that the sharing of this data is whole idea of the service, gives these retailers an outlet to perhaps do it right this time.
The amount each service will use Blippy varies. Some simply have a link telling users they can share their data on the service. Others are using OAuth to actually send purchasing data over to Blippy. How exactly Overstock.com will use Blippy is still being discussed, and should be in place by the end of the week, we’re told. But Woot and Groupon integration has already been finalized and should be live shortly.
Depsite its controversial idea, Blippy has seem some great initial traction among users. And they’ve been able to attract a choice group of investors. This interaction between users and retailers on Blippy may be the key to the future of the service. And if it goes over well, it may leave Facebook kicking itself for what might have been.
[photo: flickr/ken dyck]
December 16 2009
A Great Deal On A Handgun. Woot!
A few weeks ago, Woot opened up a new section of its site called Woot Deals. This area marked a departure for the service because it is run by Woot users, rather than a Woot employees selecting every deal. Of course, when you open it up to users, they’re going to get what they want.
Today, the most popular items in this deals section include a bunch of video games, some tennis shoes, a monitor, some laser pointers, oh, and a 9mm handgun.
Actually, the handgun is by far the most popular item of the day so far (Woot uses a Digg-like voting system on items). Thanks to a deal BudsGunShop.com is having, you can get this Smith & Wesson dual action pistol for the low low price of $283 after a $50 rebate. Of course, as the site notes, “THIS ITEM HAS HI CAPACITY MAGS AND CANNOT BE SHIPPED TO NEW YORK OR CALIFORNIA.”
As you might expect, the Woot page for the item has already turned into a back and forth about the gun laws in America. Here’s a good one, “Anyone who has a problem with America, can get the #$%@ out and go live in Canada.” Here’s another, “Guns don’t kill people. People do. Guns just make it really easy.”
Buying handguns online is not illegal in most states, but it is a pain. Apparently, you’re free to buy the gun, but it has to be shipped to a federally licensed dealer in your state, where you then have to go fill out paperwork and pass the background check before you can pick it up. Also, the idea of Woot as a go-to place for handgun deals is kind of humorous and probably not what the people behind the site originally envisioned it as. But when you open it up to the community, they’re going to do what they want to do.
[thanks Shmuel]
Crunch Network: CrunchGear drool over the sexiest new gadgets and hardware.
November 24 2009
Digg For Bargains: Deals.Woot Is Now Open To The Public
Woot, the popular bargain site that offers one good (sometimes great) deal a day, has just launched a new portal at deals.Woot. The new site is a fairly major departure for Woot, which up until now has been driven by product selections from a team of Woot employees (aside from the main Woot.com site, which is often tech/geek focused, there are special subsites for shirts, wine, and a handful of others). Unlike these sites, Deals.Woot is run by its users — it’s essentially a Digg for bargains.
The new site features a list of top deals, as voted on by the community and chosen by the Deals.Woot algorithm. This will be going head to head against other deal sites like SlickDeals and FatWallet, which have well established communities. Woot already has plenty of fans, but it may take some time to build out a base of deal hunters.
But the very top of the site actually isn’t dictated by users. Instead, it’s dedicated to “Sponsored Deals”. Woot explains that these deals are paid for by advertisers, but that they’re still bargains:
OK, yes, companies pay a little something to be Sponsored Deals. But we don’t allow just any old crap in this section. Sponsored Deals are proposed to us by other retailers, manufacturers, and even other daily deal sites. If we find the deal compelling enough that our members will appreciate us bringing it to their attention, we’ll feature it here. Believe it or not, we have a reputation to uphold.
The site has been available for weeks before now, but was only available until members up until a few hours ago.
Crunch Network: CrunchGear drool over the sexiest new gadgets and hardware.
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