Groupon, Facebook Hit All-Time Lows; Why Groupon Can't Win in Japan; Zynga Implodes!

Even though Facebook met expectations for revenues today, their shares slumped to an all-time low after-hours trading.

Facebook Earnings Hit Target but Worries Persist

Facebook hit Wall Street's bullseye on earnings and revenue was a slight beat but the stock fell below its all-time low of $25.52 a share in after-hours trading as worries about its future growth persist.

During regular-hours trading, Facebook shares fell 8 percent. After the earnings announcement, the company's shares initially rose then pulled back, falling below that all-time low. 

The company posted second-quarter earnings excluding items of 12 cents per share on revenue of $1.18 billion.

Facebook posted a net loss of $157 million, or 8 cents a share in the second quarter, due to hefty stock compensation charges related to its IPO, compared to net income of $240 million, or 11 cents, in the year-ago quarter.

Read more.

July 26, 2012

The fall in Facebook shares might be a bit of a surprise (not really when you understand that the shares were grossly overvalued at its IPO price of $38 a share; they should have been about $9). And, still, today's price at $26.95 is about 300% overvalued; also, let's not forget that recent data shows that 40% of all Facebook users are Spammers.


The one slump that shoudn't be a surprise, but still is, is Groupon. Why? when the Dow skyrockets $211 (1.67%) on flimsy "news" that Mario Draghi, president of the ECB, says he will "Do what's necessary to maintain the Euro".... (Ahem... Where have we heard that before?) Yet still drops 8.7%, now that is a jaw-dropper.


It's only end July and Groupon hit its all-time low at $6.61. At this rate, when I seemed grossly pessimistic and said, "Groupon will hit $5 by December 2012" way back in November 2011 (when the shares were at $23.32) it seems those predictions are grossly over optimistic today.


Will Groupon hit penny stock status soon? I think in the next 12 months, that is highly likely if they don't go bankrupt first. 


Why Groupon in Japan Can't Win


There is another company doing the same business as Groupon in Japan but they make it work.... Well, let's say it works better than Groupon does. That company is Recruit with their Pomparade coupon service. 


Why can Recruit make Pomparade work (or, at least not lose millions of dollars)? Simple. Groupon sells one product: a Spam mail based coupon service. Recruit sales people sell at least a good two dozen services (along with their Spam-based coupon service). 


Groupon cannot afford to place 600 boots on the ground and sell just one service. The costs of running a sales force like that are way too high. Recruit corporation, on the other hand, already has a high and very well respected market profile in Japan. Recruit already has as 30,000 sales people running around selling ads in free magazines (of which Recruit dominates the market) like Hot Pepper, R25 (and a bunch others). Recruit also has Pompare, Keiko and Manabu, ATND and the list goes on and on...


The kicker for Groupon? Recruit has a "subscription" service that only costs business establishments a mere ¥80,000 a month (about $1000) to advertise across the board in several Recruit publications (and that includes coupons, etc.) If you are, say, a restauranteur, you have your hands full trying to make your business work; you haven't time to deal with new people and, especially, new internet "stuff."


The Recruit salesman already has an excuse to see and visit businesses that have the where-with-all and capacity to spend on advertising. The Recuit salesman already has a relationship with the store owners and managers. The Recruit salesman has an arsenal of products and services that he can offer to various businesses... They already have a good name and reputation. 


The name "Recruit" is a door opener.


So when a new sales person comes in on a cold-call and says "Groupon," I'd venture to say that a very many people say, "No thanks!" or, "Recruit handles all my stuff." Or even worse, "Grop-what?!"


That's not to say that Groupon's service can't work or cut out a market share, it can. But not the way it's set up in Japan now.


I mean, think about it: How can Groupon afford to put all those boots on the ground and compete with Recruit when they sell only one product and the Recruit sales people offer two dozen? They can't.


Groupon's only hope is to be bought out by another company in Japan that offers other services. The logical choice is Recruit. But, as  said, Recruit already has Pompare... And, I'm not too sure Pompare is doing great guns either.. Maybe the Korean company G-Market?


Perhaps if Groupon had enough market share to seem a threat to Pompare, Recruit would consider buying it.... But, it seems, that Groupon in Japan has dropped off the map...


Maybe Groupon itself, world wide, is about to do the same.

Zynga, the Facebook game is also doing VERY poorly and this might bode ill for Facebook too: In Play: Virtual Farm-Backstopped Default Delay Securities Launched After Zynga Implodes - UPDATE: ZNGA is down 40% now, trading with a $2 handle:

How to Become Popular in One Easy Click!

Judging from my Facebook and Twitter accounts I can say that I must be one of the most popular people in the entire world. I have a massive amount of "friends" and "followers" (note religious connotations) and believe that I must be more popular than 97.4% of all people reading this blog right now. Bwa! Ha! Ha! Ha! Someday I will rule the world!

 EVERYBODY WANTS TO RULE THE WORLD

Yeah! I've made the big time! I have almost 1,000 friends on Facebook (OK, only 850 or so, but who's counting?) and over 1,000 friends on Twitter. Woo-hoo!


But, gee, I sometimes really wonder who these people are. I also wonder how many of those people I have actually met in person in my life? Also, I wonder how they got my Facebook address... Surely we must be friends. Facebook says so. Of that 800 or so, I reckon I must have met at least 500 of them, right? No? 400? 250? 50? 

Would you believe, two of them and their vicious canine walking in the neighborhood?


I have a very hard time with people's names. I've always had a hard time remembering names all my life. I think most people do. But it is especially difficult for westerners in Japan (and China, Korea, etc.) It's really difficult especially for people like me because of my work; because I meet lots and lots of people. I might go to a meeting at some company and there will usually be me and I'll be introduced to 13 Japanese staff at these meetings. After the meetings, I won't remember anyone's name excepting the pretty girls - and I even have a hard time with that.


The introductions will go something like this: I'll meet my contact. He'll take me into a meeting room and there will be 13 Japanese people there waiting for me. They will all stand up and get in a line to give me their business cards. My contact will say, 


"Mike-san, this is Mr. Yamada....Mr. Yamamoto... Ms. Sugimoto... Mr. Sugimura.... Ms. Murakami... Mr. Kamimura....Ms. Kawamura....Ms. Yamamura...Mr. Muraoka.... Ms. Sugiura... Mr. Tanaka....Ms. Takasugi...." and, of course, there will also be a token Suzuki or Kobayashi thrown in there....


(I think it is a Japanese law or something that every company must hire at least 10% of their staff being people with names like Suzuki or Kobayashi...)  


After getting all these people's names cards and bowing my head, I will sit down and, being none for the better, will have remembered not one single person's name excepting: "Mike." 


It's like those paintings of Jesus at the last supper. You know the name of the guy in the middle but no one knows the names of the other 12 dudes.

Author's rendition of the Last Business Meeting at 

Japanese Company. That's me in the middle.

It's kind of like my Facebook or Twitter accounts. Who are these people?

Fact of the matter is that I'm having a hard time dealing with Social Media such as Facebook, Twitter and a group discount coupon service that is local here in Japan called Pompare. 


You might wonder why I join things like Facebook and Twitter. Well, my lame excuse is that because I work in marketing and the Internet business, I have to know what I'm talking about, so I joined these services. It's a sort of study. I need to know what they are all about and how to use them. I always bend the rules and see how far I can go before the suspend my account. Facebook has suspended me twice. Twitter hasn't suspended me ever (but that's OK as Twitter service is down and often unreliable anyway!) But I often find myself wondering why I even bother. 


From using these services, I often wonder what the reason is that many others joined too. Excepting that they are more interesting than TV... But that's nothing to brag about. I can get more entertainment out of a piece of bread and my toaster oven in one evening than I can get out of watching TV.


But, as usual, I digress...


First let me tell you about Pompare. Pompare is a crappy SPAM mailing system kind of like Groupon. Their business model revolves around sendng people SPAM in the hopes that they buy something. I think SPAM is a crappy way to do business and it shows with Groupon but at least Pompare has a portal where people can gather. That's why they will blow away Groupon in this country and why they aren't quite as bad as Groupon, but they still are a bit sucky.


They seem to be trying very hard to irritate me. 


Pompare, the group discount coupon service isn't really all that much trouble, I suppose. The problem is that no matter how many times I try to quit, they keep sending me emails. I've cancelled my membership now three times, but got another mail from them this morning.


Then there's Twitter. Why do people do Twitter? I think lots of people use Twitter like I do. I use Twitter to send out notices of original content and notices about stuff I've written at Lew Rockwell or this blog, or, perhaps for events. I see other people using Twitter to sell stuff and other junk.


I think a lot of people use Twitter and send out Tweets but does anyone really read Twitter? I doubt it. I also wonder what the value is of having, say, 35,000 people you follow and 35,003 people following you. It certainly cannot be a proof of popularity (especially since there's ads all over the place selling, "1000 Twitter followers for $14!" and things like that). Also, I mean, jeez, how could anyone be reading the Tweets of the 35,000 people that they are following? I can't even keep up on answering the emails from the 4 or 5 people who write to me everyday...

CLICK ON IMAGE FOR LARGER VIEW

Here is my Top Ten referring sites to this blog. 

Do you see Twitter? Nope. Neither do I. 

Maybe I don't understand how this works? Help!

To make it clear, I believe many people use Twitter to send out messages and sell and promote, but I don't think very many actually take time to read Twitter. If people want to waste their time and read junk, then they'll use Facebook (actually, in Japan,  Facebook is an "also ran". The most popular of those sites in Japan are, Mixi, Gree, Mobage Town, etc.)  


Facebook also makes me scratch my head for many reasons. One, far too many people use Facebook far to often to link to some news article or editorial that they read on some other site. They don't link to some original content that they created or even pictures of them and their kid at a picnic or something. Why do they do that? I don't know. Can people's lives be so boring that they have nothing to write about? Since when was Facebook designed to use as a news aggregate site?


I use Facebook exactly like I use Twitter: To promote and draw readers to my useless blog. That's it. I don't want people knowing about my private life. I don't want to send people pictures of my son and me eating food at some festival in Japan. I only have only a handful of real friends in my life and that's it. I don't know where in the world all these people came from who are my "friends" on Facebook.


Maybe it was because of my job. When you work in the mass media and you intentionally work to build a cult of personality for yourself and your show and the members of your team and you want to "sell" and "promote" then, when you get requests from people to become "friends" then I have a hard time saying "No!" So, I always accept; it's just easier that way and I don't want to offend anyone....


But darned if almost every time I want to "add friend" (those few times) I get a message that says, "Do you know this user personally?" I even get these messages when I am recommended by someone who is my friend to become friends with that person.

This happens all the time. What's the point? If the receiver

doesn't want to "friend" me, then they deny or cancel, right?

Though, I must say, that the friend requests from girls who pose in their avatars showing lots of cleavage that look like they are selling prostitution services, well I always ignore them (of course, though, after checking their page!) I mean, what's the use in being a friend of a prostitute on Facebook fer chrissakes? I can understand being the friend of a prostitute in real life but in virtual world? I don't get it! Talk about blue balls!


So, now, if you look at my Facebook and Twitter, it looks like I am an extremely popular guy. Heck, I even have friends in Columbia and Brazil and the closest I've ever been to those places was Tijuana Mexico or the San Diego Zoo. I think I met a guy from Brazil once but he was a world famous soccer star named Zico or Rico or something like that so I doubt that he'd send me a Facebook friend request. (Heck, most soccer stars are too illiterate to even know how to use a keyboard or do the alphabet for that matter.)


I laugh when I see where on Facebook it says something like "you and so-and-so have ... mutual friends" and it shows a number. I think it should be more specific. It should be "mutual friends" and "real friends." It should say that "you and so-and-so have ... actual friends." And there would be a drop-down tab that would scroll up to five people in total and that would be it.


True friends will drop anything and travel to your side if you were in trouble and in need of help. Ninety-nine percent of all "friends" on Facebook, well on my Facebook at least, I don't ever recall meeting. You can bet that if you see someone's Facebook and it is like mine with several hundred friends, that we haven't met even a fraction of them and, if we walked past them on the street, or they us, we wouldn't recognize each other in a million years.


Facebook should have different categories: "Real Friends" (up to 5 ~10), "Friends" (maybe 20 or so), "Acquaintances" (maybe a few hundred), "People living on the same planet as you" (That would engulf 97.8% of all Facebook's current "Friends" category).   


I'm looking forward to the day when I can have my very own Facebook where no one can find me and I am the only one who can invite people into my own little world. I'd have about 4 or 5 dear friends and we can communicate heart to heart... Oh, wait a minute, we do have that. It's called email, the postal service or, even, that high tech wizardry know as a telephone. 


I'm wondering what is the purpose of this narcissistic Facebook type of nonsense that brags to the world look at me! I'm somebody! I have hundreds of friends!...


...Of which, 90% of those I don't ever remember meeting...


I am somebody. You are too. 100 ~ 5000 Friends on Facebook (the limit) means nothing. I'd rather have a core of 5 good friends who I can depend on in my life than 500,000 people whose faces I don't even recognize or they, me.


Instead of getting 100 virtual friends, get out of the house and try to make one real friend. Life is more important than sitting in front of a screen be it a TV screen or computer screen.