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Write 2 page essay on the topic Google talks with groupon are ended without deal.al Shareholder Services) reported that Google’s overall ranking on corporate governance was just 0.2% in comparison w
Write 2 page essay on the topic Google talks with groupon are ended without deal.
al Shareholder Services) reported that Google’s overall ranking on corporate governance was just 0.2% in comparison with Standard and Poor’s 500 firms – in other words it outranked just one of the other companies (rankforsales 2004). One of the major areas of concern was the way the founders and other insiders were given extra voting rights through the IPO.
These share holders had the power of 10 votes per share as compared to the normal share holders who had 1 vote per share powers (rankforsales 2004). Another concern was that of low independent board membership ratio. This shows that founders of the company have not been too keen on losing control over the reins of the company.
Groupon is still a closely held company. The company is expected to grow very fast and is today the number 1 player in its category. The company has been using innovative marketing concept called “reverse marketing”. Here the company does not force customers to buy through blatant advertising but through providing them with information regarding discounts and gives them the choice to decide which products to buy. The company uses the collective buying concept to offer huge discounts to customers and provide the businesses a huge database. The unique way of business which the company follows has provided the company a negative working capital situation. This means the business gets money upfront from their customers and pay their business partner later on as followed by Wal-Mart also.
Mismanagement of the deal seems to be behind this break-off. The problem seems to be the break-up fee that Google has offered. As a part of compliance management, the company which has agreed to be sold is bound by the breakup fee agreement. However, many companies do not comply by the initial agreement and accept counter offers from other firms. In this case Google has publicized about the fee being the dampener. This can be a possible activity to put pressure on the management of Groupon to agree
