Polygraph Media Blog

Social, the Salesforce acquisition of Buddy Media, and Real Value

Tonight, this blog post summarizing year 1 of the Salesforce acquisition of Buddy Media.  The numbers, if taken on face value, are brutal as the endeavor is a big money loser so far.

The picture painted is probably a tad on the pessimistic side.  If your Salesforce, you don't buy a Buddy Media to harvest but rather capture market share.  I'm sure a conscious decision was made to spend whatever necessary to win share asap -- so costs are going to be higher in the short-term than revenue.  This is why people invest in Salesforce.com, for the prospect of future cash flows and the benefit of capturing share now at the expense of optimizing short-term financial results.

Remember also that this particular business is super competitive with Salesforce, Adobe, Google, and Oracle all competing in the SMMS space against a few independents (Sprinklr, Spredfast).  Keep in mind also that a lot of SMMS work is still being done manually by service businesses from IBM to digital agencies to traditional agencies now competing aggressively in social marketing.

But I do think there is a lesson lurking in here -- that social is still an unproven commodity in the short-term.  Folks like us and others are doing what we can to find value in social media.  Investors who get into social media plays, whether through publicly traded companies or those selling privately held stock, do so on the belief that their picks will help the marketing ecosystem in some way.  But it's still the wild west when it comes to delivering real value.

Whether it's Buddy Media struggling or Facebook ads struggling or folks like Mark Cuban questioning whether or not he should pay for Facebook News Feed visibility, it all comes down to one critical and unanswered question -- what is the value of social marketing for marketers?

When the answer to this question is as simple as it is for search... i.e. Google Adwords... billions of dollars of new shareholder value will be unlocked.  Now where exactly will that be, and when?

Social Marketing & The Quantified Self

The "Quantified Self" movement is something you've probably heard of over the last few years -- the idea that you can quantify previously mundane activities that you've otherwise ignored to attach a number to the things that you do.  There's plenty of reading about it on Wikipedia if you'd like to dig deeper.

In real life, the movement has manifested itself in successful consumer products in/around the fitness industry, such as the FitBit, numberous nutrition apps on the iPad, Garmin products, and the Nike+ line of products.  

In fact, Nike is releasing a product specifically for basketball so you can quantify your vital stats on the basketball court.  Allow me to let the expert, LeBron James, explain it.  

 

Sidebar -- but as a 38 year old, aging weekend warrior, I just don't want to know how bad my numbers are and especially as they compare to friends... but I digress.

Others have added a social element to tap into how we respond to peer pressure and/or social humiliation -- such as Strava and the Withings Scale that tweets out your weight.  Yikes!  

Why do people quantify themselves?

• People quantify themselves when something is wrong and they want to fix it.
• People quantify themselves when they're doing something right, and want to make sure they continue to do things right.  
• People quantify themselves when they want discipline to do the right thing, even though their natural inclination is to not do the right thing.
• People quantify themselves when they want an objective measurement of how they are performing at something, relative to peers or competitors.
• People quantify others when they want to use data & milestones to understand things they cannot understand, or as a proxy for heavy-handed, micro-management.

Numbers have a way of cutting through the clutter and capturing only what really matters... outcomes.  Combining numbers from different sources can give you a quick, objective look at everything that really matters to you.

If you take numbers the next step to analysis, you can begin to draw conclusions based on the data but also including human judgment where it's appropriate.  Leave analysis to others, and you're getting their interpretation of the data.

We found it interesting that Jeff Ma, formerly of the famed MIT Blackjack team, recently ventured into this space to quantify what people are doing in the workplace with his new startup, TenXer.  Right place, right time -- like Facebook, this would've never flown even a decade ago.  But times change and now it's a brilliant idea.

We're seeing it in social marketing and we're seeing it move into other areas of marketing that were thought to be a "black hole" previously.

We're at the beginning of a bigger trend where the "Quantified Self" moves into areas beyond personal improvement, fitness, etc.  People are learning the value of numbers, metrics, and how to apply them to make better decisions.  We're happy to be here at this critical time.

What Will Win in the 2nd Great Tech Boom

I spent a lot of part I of my thoughts on 2011 & beyond in our industry focusing on what I don't think will work.  This blog post will be markedly more positive, at least for those companies that I think are going to make it after all.  Thinking about it, though, I think some commonalities are emerging.

But let's step back and review some concepts from Part I.  I spent a lot of time on the concept of economic viability as judged by two simple concepts -- customer acquisition costs and lifetime value (LTV).  Simply put, if your LTV after churn exceeds your fully loaded customer acquisition costs, you're a moneymaker.  If not, you're a failure.  There are lots of ways to analyze businesses, but if you comprehensively and accurately know marketing costs and LTV in what is of course an uncertain business environment, you're doing better than most.  That's easier said than done.

Now hold that thought for a moment.

I would argue to you that there is overwhelming evidence that we're in a mini-bubble, a lower-rent, better justified version of the first one (1997-2000).  There are a lot of sure signs -- new businesses getting huge valuations even in public markets, investors in those businesses trying to convince people that those valuations are indeed rational, the huddled masses listening in violent agreement (amazingly enough), venture capital raising huge new funds, and billions of dollars going into startups worldwide again.

And to repeat before I go too far, I don't think this is a terrible or irrational thing.  Social media, location services, smartphones, tablets, local/SMB services, and other sectors are getting turned on their heads a bit -- and the uncertainty/disruption creates opportunity for investors.  So please don't put words into my mouth that I'm opposed to what is happening or think it's insane, because I am decidedly *not* there.  I'm discerning, and that's fair.

Anyway, as we are at least in a mini-bubble, a lot of businesses have been created in a short period of time.  All have one thing in common: they are fighting like hell for market share.  They're fighting for attention alongside others in the startup community.  Enterprise startups need enterprise validation -- and fight for enterprises and/or agencies to adopt, promote, and pitch their products and services to decision makers.

And so what that creates is hypercompetitive frenzy, where there are probably at least 1-2 startups and often more for any opportunity you may perceive to exist in the world.  Tech is one of the most competitive markets in the world because barriers to entry are relatively low (no PP&E in the era of Amazon Web Services) and you can win with your brains, a good idea, and great sales execution.  Thus, the market is incredibly efficient at finding every glimmer of opportunity and taking advantage of it.  So you get a ton of startups seeking attention.

These startups fall into three categories in my mind, and I'm sure there are more.

• Destinations -- places that consumers and businesses are expected to visit repeatedly. Branding is critical, otherwise you're out of sight/out of mind.  Think modernized traditional media (Mashable, ReadWriteWeb, Techcrunch, Huffington Post) but also the hundreds of thousands of applications on the iPhone and Android (Gowalla, 4sq), game publishers, daily deals providers (currently), apps like Pandora, etc.  If you're a destination, you're only as good as your branding + your last trick.  Don't rest, because you can't.
• Service businesses -- organizations that provide human capital to solve specific problems for clients.  What's critical in these is to not be a commodity.  If you are providing a commodity service, you're racing to $0 margin.  If you have some competency that makes you among the best in the world, you're probably OK.
• Enablers -- groups that deliver a product, service, or data that fundamentally makes people more productive.  This can be a tangible time savings benefit, a cost savings benefit, or ideally both.  It can also be a "data benefit" -- removing barriers to data can be a huge enabler.  Think of Amazon Web Services -- it's a genius bet on the need for developers to quickly conjure processing and storage cycles to develop, run, and scale applications.  Same goes for the Apple App Store, Windows Azure, Facebook with social plug-ins that have now become ubiquitous and of course the Facebook APIs, LinkedIn for resumes and employment/employee data, arguably Twitter for media publishing and content discovery, local Austin startups Infochimps (data) and Famigo (publishing child-friendly content), and my favorite new startup, Twine.  All of these companies, in their own way and perhaps by accident, enable people to conduct business and be more efficient.

Not that all the destination business examples I listed are fads, but a vast majority will be nothing more than that because they're currently capitalizing on something that is presently *hot*.  Mashable is great and a must-read, but would it get 20m+ monthly unique visitors if tech was not hot?  We just saw Gowalla deadpool because it took advantage of the hot LBS market, but could not expand beyond that.  Arguably Groupon has cooled off because daily deals just stopped being compelling, and now as a result, they're dealing with the customer acquisition cost/LTV problem albeit as a public company.  Ouch.  Destination businesses have to grow rapidly and find ways to be essential and build brand, or they're ultimately dead.  The ones that go the VC route therefore raise a ton of cash but they're a lot more uncertain than they appear and are under a ton of pressure.

I'll defer a broader discussion of service businesses to 1Q 2012 for now.  My point today is more about disruptive technology providers anyhow.

Enablers, in my view, are where I'd focus dollars if I were an investor.  First of all, they're differentiated by their ambitions.  They are not trying to change the world, but rather to provide a useful service that other people can some way build upon -- be it technology, revenue, knowledge, data.    Ergo, their bet is on the opportunities they see more broadly.  They focus their efforts on the utility of and the benefits of the product/service they're offering *to other people*.  Some of those will win, some will lose.  But enough will win to make access and all the hard work that entails a worthwhile pursuit.  There is less direct interaction with the end customers, but rather tons of interaction with modern-day "channel partners" who can offer products and services to hundreds, thousands, or more end customers.  But the Enabler is not invested in any one per se -- it's a "portfolio theory" approach.

The one thing I think winners will ultimately have in common in the 2nd Great Tech Boom is precisely what winners of other eras have realized.  Infrastructure stands a greater chance of winning than apps, destinations, and other properties that are by definition perhaps more "opportunity" plays than "sector" plays.  It's not to say that all Destinations will fail and all Enablers will succeed.  But I'd make a pretty big bet that we'll think of Destinations fondly as relics of a past gone by, and that Enablers will as a group have much more lasting power.

The Dot-com bubble, the 2nd Great Tech Boom & Economic Viability

I suppose we are three years into the boom of this cycle in tech, and 2011 has finally given us a few IPOs -- Groupon, Zynga, Pandora, Angie's List, and LinkedIn.  Others like Facebook, Twitter, and Yelp reportedly intend to go public in 2012.  Investment continues to pour into startups, although there are signs that early stage investments are dropping slightly in favor of Series B and Series C investments into companies that are scaling to grow and eventually reach a liquidity event of their own.  Some startups like Gowalla have hit the deadpool.  Others like Hunch and ReadWriteWeb have modestly exited.  And a wide array of others are fighting for their place in the world.

If you've read this blog for awhile or seen some of my posts on Mashable and other publications, you know that I've been critical of a vast majority of new products and services that have been invented in this cycle.  But it isn't because I don't like the companies or their founders.  Quite the contrary -- I've interacted with many and like just about all of them personally.

The problem is that they all face the same underlying economic problem -- for many, customer acquisition costs are significant but there is little/no lockin.  At the end of the day, all of these businesses will have to face that core economic reality.  If it looks like there is not a chance these business can overcome the customer acquisition problem and become economically viable, I get skeptical.

Interestingly, almost all the local/SMB plays have heinous customer acquisition metrics as reported by their S-1s and other financial statements.  It's why Wall Street has not been kind to Groupon, Angie's List, et al.

As it happens in every boom cycle, a vast majority of us get intoxicated by the possibilities for both startups and newly-minted, publicly traded companies.  But those very possibilities dominate our thinking -- and we underestimate the risks and/or the costs associated with building audiences of loyal customers who won't migrate.  From a purely economic standpoint, the migration/churn problem is just as bad as the acquisition problem.

I had an exchange with Robert Scoble yesterday on Google+ where we briefly debated this very issue.  Robert is one of the better pundits out there, but in my view he's a tad optimistic because he thinks of the possibilities far more than the risks, alternatives, and customer acquisition costs.

I am perhaps the opposite -- I think in economic terms and am influenced by the last tech bubble.  People said the same thing about Priceline, vertical web sites like Pets.com and Living.com, Webvan, eBay, Amazon, etc.  The economically viable ones survived.  Those that were not died.  Optimists and pessimists were both correct, as I'm sure they are now.

When projecting ahead and thinking of the survivors of this cycle, ask yourselves which properties are truly economically viable in the long-term.  That's the only filter that matters.

It's why I continue to be bullish on Facebook -- they're mainstream and habitual.  Can they screw up?  Of course.  But the collective community of friends on Facebook makes it a part of our lives that is more or less impossible for us to leave.  Path can challenge Facebook as it is more about "close friends", but they still have an uphill battle to climb to gain mass mainstream adoption.

In the 2nd part of this blog post, which I'll release in a few days, I'll talk about other winners I foresee... and the thing that I think all will have in common when it's all over.

Groupon, the S-1, and the state of the group purchasing market

A few quick thoughts on group purchasing this morning.  We have a pretty unique perspective on this business because our first launch was a local coupon platform.  We considered adding group purchasing to our product, but we did not initially do so for a few reasons all related to the fact that we didn't think the business was sustainable.  First, we thought the discounts were too high for most small businesses to bear long-term.  Second, there was no apparent long-term competitive advantage as the technology and business process could be easily replicated.  Ergo, millions of dollars would have to be spent on customer acquisition in a business where competition would drive down operating margins.  i.e. bad and worsening economics = no thanks.

Several things happened throughout 2010.  Millions of dollars were being earned by Groupon, LivingSocial, and the hundreds if not thousands of blatant knockoffs built by enterprising developers around the world.  It wasn't easy answering questions about why we didn't take advantage of this opportunity, and we were starting to question ourselves in the process.  Even our partners started to ask about group purchasing more and more as the "lore" of "millions" of "easy profits" became legendary.  We reluctantly added group purchasing to the Lasso platform in early 2011, but not without the reservations that we always had about the economics of the business.

Around that time, we had also been brought in to talk about group purchasing with a few companies who were not making the money they expected to make with it.  We pretty consistently heard problems related to the economics -- either customer acquisition was tougher than expected, the merchants were pushing back, or both things were happening.  I remember saying sometime to someone (can't remember who) in the early spring that the worst job in the world was being an oppressed group purchasing salesperson.

Now after reading Groupon's S-1 in detail, I am a little stunned at just how bad the economics of group purchasing are playing out even for the "market leader".  I thought second-tier competitors faced a much bleaker situation than the market leaders.  But if Groupon is suffering, who isn't?  Maybe the entire group purchasing industry is just a big money burning machine.

Folks in the local media business have taken a lot of criticism over the last decade for failing to modernize their businesses -- more or less for focusing on revenue and not on new business models.  That criticism is pretty fair, but it is what it is.  Local media companies have operated profitably for many years by doing the same things -- so why would they change significantly especially when executive management just has to keep chopping wood to sail into the sunset for a very comfortable retirement.

But here's what's a bit horrifying for technology folks -- critics at local media companies may just be correct to ignore group purchasing.  Unless something changes pretty significantly, group purchasing is headed down a path of other overhyped "technologies" that just don't make economic sense.  Group purchasing was considered to be a "no-brainer" just a year ago.  Now after reading the S-1, do you still think it is a huge opportunity.

Consider a few numbers from the S-1:

• Groupon lost $420m in 2010 and $117m in Q1 2011.
• Groupon earned $713m in 2010 (far less than the $1-2 billion reported elsewhere), but did earn almost $700m in Q1 2011.
• Marketing + SG&A was 178% of Gross Profit in 2010 and 143% in Q1 2011.  Yowza.

So all the numbers say at present is that you can make billions of dollars in revenue if you spend billions and more.  I can walk around my neighborhood and give away $1.25 for $1 all day long. :-)

But in all seriousness, the S-1 was really the first time the general public got a look under the kimono of the world's leading group purchasing provider.  Here's what it told me:

1. Groupon can't continue as is forever.  They'll have to get more efficient and/or eliminate some competition.
2. They'll have to become considerably more innovative.  Groupon Now is one such innovation, but even that will take considerable marketing funds and great execution to work.
3. Being a group purchasing provider is a really terrible business at scale.  I don't doubt that smaller companies can be profitable winning a niche, but local group purchasing done at scale all around the world is tough especially as competition intensifies.
4. Group purchasing, as it currently exists, cannot win the local advertising market.  In a business where nobody involved in the transaction truly wins -- the provider or the local business -- interest will fade.
5. New media companies that thrive in the coming decades will effectively combine content, local advertising, and services for advertisers as an agency would.  I particularly like the work that our partner, Culturemap, has done with their "hybrid" new media play.

Deal data has always been the name of the game -- and will define the future of this business.  This is why I like aggregators who rise above the fray -- Yipit is one such company.  It's also why I think Facebook has gone the aggregation route as well.  More to come on this as it all plays out.

8 Observations from #mashcon (Mashable Connect)

I was fortunate to attend Mashable Connect late last week -- a great conference down in Orlando.  I don't have a ton of time to write right now, but I thought I'd jot down some observations.  Here were my takeaways:

1. Surprisingly (to me at least), I didn't hear a lot of innovation from the speakers.  The bigger companies innovating were really just showing off or describing their incremental advances on the iPad and in social.  The agency folks didn't really share anything I hadn't heard before and the startups were "eh".  No big deal but I didn't hear anything earthshattering and that shocked me a bit.
2. I though Michael Lazerow (@lazerow) from Buddy Media had an interesting vision.  It was almost a mini-pivot in that Buddy is moving from customized Facebook apps (where FBML once provided a "moat" but with the iFrame no longer does) to Social ROI.  Who knows how that will work.
3. I did talk with a lot of "social media cheerleaders', which is fine but to me indicative of both the fact that I was indeed at an industry event and that we're in a bubble.  Bubbles occur in any industry where there is rampant optimism and where skeptics are unpopular and their opinions are almost shocking.  An interesting data point for me was when @districtjoe (great guy) pointed out that I'm skeptical about everything and that he doesn't hear that often.  It's called an echo chamber & most folks at the event were squarely in it.
4. I loved @steverubel's clarity -- overall his presentation was great.  His explanation of the cloverleaf really made a lot of sense to me -- I had seen the illustration before but had not heard it described so well.
5. As is typically the case, there are a few brands who are silently & humbly kicking ass.  You know who you are -- and you know far more about the business than many of the invited speakers.
6. @scrollmotion dragged me kicking and screaming into submission.  The iPad (and the "tablet movement") is indeed real and here to stay.  Really impressive stuff.
7. I heard a great argument for Twitter from @jkrohrs, a new friend I made from ExactTarget.  I am not sure I totally agree with his points that Twitter is better for marketing than Facebook, but I understand the argument better just from spending a few minutes with him.  Smart guy.
8. Finally, this one has been covered a bit but I'll say it again -- tech startups are starting to behave more like agencies and vice versa.  Agencies control customer relationships and are finding small development projects that can be productized.  Tech companies are realizing the limitations of a software business model & can be much more profitable if they include a services/consulting component.  That's a dirty word for a lot of VC-funded tech startups, but it may make them financially viable and it can work out that way faster than the alternative.
9. (bonus) I really like Gowalla's clarity now.  They seemed to get caught up in "check-in mania" last year & it confused their value proposition.  Now they are enhancing experiences with location and vice versa.  Much clearer.  Much better.  The messaging and the approach fits them.  I hope they succeed.

Congrats to the Mashable team for a great event -- I really enjoyed it (maybe at times too much!!).

 

Brands and the valid hype around Social Commerce

A few weeks ago, I was honored to be asked to share my thoughts in The Future of Marketing's 2nd virtual conference.  They interviewed 60 experts worldwide on where things in marketing are heading, specifically as it relates to personalization.  The event took place today, so you can listen to the 60 minute event by visiting the link above.

Naturally, Facebook is leading the way in personalization because profile data is so rich and relatively accurate.  Sure, some people lie in their profiles, but the vast majority of Facebook profile data is accurate and most Facebook users are real. 

Targeting users based on personal data has been the golden goose of advertising for a long time. Magazines and other publications with highly concentrated audiences have always fetched a high CPM relative to publications targeting a broad audience.  Facebook allows brands to tap into these demographics in ways that very few Internet properties have delivered.

As large enterprises and brands start to rationalize the expenses associated with maintaining and managing social assets, there will be increasing pressure to monetize them directly.  Facebook is leading the charge as the platform of choice for social commerce.  It has a massive lead in audience and targeting capability because profile data is the centerpiece of the technology.

More to come on this as certainly our business is focusing in coming months on social commerce for brands and large companies.

Launching Lasso v3 and what is social commerce

We're busy hatching version 3 of Lasso, which brings us squarely into the fray of social commerce. The first customer has gone live and several others are following suit shortly.  I'll share these examples when they go live throughout March 2011.

So what is social commerce exactly?

We think of social commerce as the broad requirement that marketers will increasingly face in 2011 and beyond to begin to make money directly from the relationships that consumers have with one another.  That can take place on Facebook, Twitter, e-mail, mobile devices, other social networks, and web properties.

The best social commerce product and solutions providers will have technology and business processes that make these things happen without annoying consumers.

Groupon and group purchasing companies have dominated the landscape of social commerce thus far.  We have a group purchasing offering in Lasso v3.  But we're also (and perhaps more) interested in what comes after group purchasing.  Are there other ways that groups will form and make collective buying decisions?  How can technology help businesses earn more revenue and profit from groups they have either created or fostered over the years?  And what can be done for larger organizations that have earned large audiences over the years -- how can they be empowered to succeed?

These are some of the questions we are answering with Lasso v3.

Latest Mashable Blog Post - LivingSocial & Amazon

Yesterday around 1:20pm, I succumbed to the maelstrom of social media wonderment and became the 645,773rd person to buy $20 in Amazon merchandise for $10.  I reacted much like I'm sure you did -- "it's a no-brainer!"  I will use the proceeds to buy a book or two for my wife on our Kindle.

I thought I'd share some additional thoughts on the guest post Mashable was so gracious to post -- it is the second time they've done so for me.

Quick administrative note/disclaimer first... posts for places like Mashable have to be a little edgy and controversial to get shared, commented on, mentioned, and read.  The end product was a little different than my original thoughts.  They always are.  :-)

And the Mashable team changed the title... the focus of the article was really more about why the LivingSocial-Amazon deal is really the beginning of Social Commerce 2.0.  No worries.

Now, to elaborate.

First of all, what a clever way for Amazon to maximize the value of their investment.  I don't know the terms of the revenue split between LivingSocial and Amazon, but I imagine this was part of the plan all along.  Amazon makes an investment & sets aside a little extra money to cover a planned group purchase.  They use the strength of the Amazon brand among consumers to create a no-brainer deal that would help both LivingSocial and Amazon acquire new customers.  They made the amount of the transaction high enough for people to share & care, but not so high that it was a total loss for Amazon, which runs a pretty tight ship as it is.

LivingSocial gets inexpensive customer acquisition and tons of new accounts.  Amazon uses its strength in the marketplace to dramatically increase the value of its investment.  Everybody plays, everybody wins.  It was *brilliantly* executed by all involved.

As CEO of a company in the social commerce space, I can tell you that this very much fits in to the broader picture of trends we are seeing with group purchasing and social commerce:

1. The increasingly crowded group purchasing landscape has made it tougher for the various competitors to attract the top local advertisers in almost every market.  Consistent deal quality has suffered tremendously.  So there are more tanning beds, teeth cleanings, and acupuncturists -- and all of them are more "niche" businesses that are by definition less interesting to the mass market of consumers.

2. Group purchasing has therefore gotten less effective at the local level, and leading providers are now seeking top national/international brands to do group purchasing deals (e.g. Gap, Amazon, etc.).  Late entrants have struggled as, well, they're late to the game.  Margins shrink for all the "technology providers."  Advertisers aren't as happy and are getting pitched frequently as sales pressure intensifies on group purchasing providers.

3. However, consumers still respond to group purchasing as long as the quality of the deal is very, very high.  The Amazons/Gaps/best restaurants/best retailers of the world do a lot better than your aforementioned neighborhood acupuncturist.  So group purchasing (as it has been defined thus far) is less special and looks more like any other marketing tactic with every passing day.  i.e. if you are running marketing for an established and/or successful entity, you're at a huge advantage over someone who isn't.

4. Despite what a deal like this may make you believe, consumers have *no* loyalty to individual group purchasing providers today.  Consumers just want to save a buck at places where they know they'll shop anyway.  The Gap and Amazon were successful because of who they are, not because of the plumbing (Groupon and LivingSocial) that allowed people to buy gift cards.

5. Brand/corporate advertisers and their agencies can effectively run these types of campaigns themselves and they will as they get more savvy.  They'll also do so for the cost savings.  The technology is there for companies to take matters into their own hands.  Most have captive audiences already in Facebook pages and e-mail lists, among other assets.  All you need is a great deal to offer and the right social commerce middleware (which we have - yes I can say that because you're on my blog).

6. Ergo, brands and people with big audiences ultimately get more and more competitive with time, and they win in the end.  It may take ten years, or it may take two.

Whether we're talking with big, recognizable brands, major media companies, or major companies, it's all the same.  Inertia is out.  Action is are in.  Audiences are again the key. Technology helps major players tap into the audiences.

And most importantly, this LivingSocial/Amazon deal just higlights that there is no brand affinity in "deals".  Consumers will go where they can save money at places where they want to spend money. The company to scale this capability wins and becomes Groupon 2.0.

It will be a very interesting 2011 as this next phase of social commerce begins to shake out.