Groupon (NASDAQ:GRPN) Acquires SideTour for Undisclosed Amount
NEW YORK – In an attempt to differentiate themselves from other daily deals sites such as LivingSocial, Groupon (NASDAQ:GRPN) announced the acquisition of SideTour, a hub for hosting and booking small local events in Chicago, New York, Philadelphia, and Washington, D.C.
Analysts believe the deal was an attempt to move away from daily deals by providing unique experiences and activities that cannot be found anywhere else. According to Edward Woo from Ascendiant Capital Markets, ‘they’re trying to have more special, differentiated types of events for their users so they will build more loyalty and drive more traffic to their website, and this acquisition is similar along that path.’
While customers have turned away from daily deals, Groupon has found success by shifting away from those emailed coupons and toward longer-term deals and closer relationships with merchants for new services like restaurant reservations. Investors have favorably received the move and shares in Groupon have gained almost 120 percent this year.
The shift has become an important part of the company’s strategy, and in recent months Groupon acquired other small startups including Glassmap, which provides users with real-time information on their friends’ activities and local events, and Plumfare, which helps users discover new local food and restaurants, to help bolster its mobile business.
According to GrouponLive General Manager, Greg Rudin, ‘by offering these highly personalized activities, tours and memorable things to do through Groupon, we can deliver even more fun ways for our customers to explore and discover the best local experiences.’
Sources say that SideTour will continue operating as a separate entity, and Groupon will distribute their events to its 43 million active users and assist SideTour’s expansion into new markets in the coming months.
The SideTour acquisition comes on the heels of the Groupon’s acquisition of Blink Booking, a Madrid-based startup behind the last-minute hotel-booking app Blink, the deals service announced Monday. The Blink acquisition was seen as part of a strategy to expand Groupon’s presence in Europe where Blink has more than 600,000 users.
It remains to be seen how long Groupon’s shopping spree will continue and while the move has had little impact on the company’s results to date, it would appear they are attempting to diversify their service offerings. Given their user base, the acquisitions appear to be a smart move, but only time will tell.
Shares of Groupon closed at $ 12.64 on Friday.