How TicketMonster Can Change The Game For Groupon Inc. (NASDAQ:GRPN)?
Groupon Inc. (NASDAQ:GRPN) announced earlier this week the acquisition of LivingSocial’s TicketMonster for $260 million as the company will be paying around $100 million in cash and approximately $160 million in Class A common stock. The Groupon CEO Eric Lefkofsky said, “We’re also excited to announce today that we’ve signed an agreement to acquire Ticket Monster which has been successful building a mobile commerce business in one of the largest markets in the world. It will serve as the cornerstone of our Asian business, bringing scale and ecommerce expertise to that region.”
Despite being arch rivals, LivingSocial will become a Groupon stockholder as a result of the deal which is expected to close next year. Earlier, LivingSocial acquired TicketMonster for an undisclosed amount back in 2011 and has been trying to sell it since late last year. TicketMonster has over $800 million in annualized billings and is expecting to receive approximately 10% of that in revenues.
Earlier the Chief Executive Officer of LivingSocial, Tim O’Shaughnessy regarded TicketMonster as ‘non-core asset’, not matching with their strategic focus. The CEO explained that this sale would enable LivingSocial to invest more aggressively in its product development, marketplace innovation and marketing in the U.S. as well as other regions in which it operates.
While this acquisition would make South Korea, Groupon’s second largest market after the U.S., it would also aide Groupon’s global transition to a mobile commerce marketplace from a flash sale e-mail model.
Monetization from mobile transition is not just a savior for Groupon Inc. (NASDAQ:GRPN) but it is the must to do thing at least to defend the losing grounds not only from new entrants but also from the strife completion posed by tech and retails giants through their Google Offers, Amazon Local and related services. Earlier the company also revealed revenue loss due to introduction of ‘promotions’ tab by Google Inc. (NASDAQ:GOOG) in its Gmail service.