How Groupon Will Expand in 2012

Jeremy Mims is a guest author. If you’d like to submit a guest post, click here.

As we arrive in 2012, Groupon may currently be known for pioneering the daily deals market, but as the company matures, its path will also doubtless expand outward, as many expect it to. Consider: “Google is a search engine.” “Apple is a computer company.” “Honda makes motorcycles.” All of these are true statements, but none of them accurately describes the whole story. At some point, each one of these companies realized it could become a whole lot more, and expanded far beyond its core product.

And this is likely the year that we see that happen with Groupon. It has to be, now that the company is public. So perhaps that’s why I have such a hard time keeping a straight face when people say that Groupon’s business model is fundamentally broken. It’s not. If anything, its second act has the potential to be even bigger than its first.

To review: Groupon’s success thus far has been getting small businesses to spend money online. This is no small thing. The company is discovering corners of the world that Google still hasn’t touched. The relationships Groupon has cultivated are real and powerful, and they’re getting there first. But lead generation is just one step in making a small business work. It’s an important piece of the puzzle, but it’s still just one piece.

And small businesses need a revolution in the way they do almost everything. I should know. At OwnLocal, we work with thousands of these merchants every day. Everything from accounting software to inventory management to social media could use an overhaul from the small business owner’s perspective. You name an area and there’s probably a startup hard at work building a tool small businesses truly need to be successful. Unfortunately, what these startups lack is distribution.

So, distribution isn’t Groupon’s problem. The company will leverage these real relationships to sell a small business everything it needs to succeed online. Groupon’s large network of salespeople will secure its place atop this multi-billion dollar opportunity.

If you’re a small business, Groupon will likely soon:

• Manage the bulk of your online marketing.
• Control your booking software and calendar.
• Handle your loyalty program.
• Build your website.
• Represent the bulk a small business’s online reviews.
• Manage your e-mail marketing.

And if you’re a small business, you’ll welcome this development. Finally, a one-stop shop for everything you need to make online work. There are millions of businesses in America alone craving a trusted partner to make their companies competitive in the digital world. Best of all? Groupon will be in a position to deduct the cost of these services from deal revenue or give these services away just for continuing to run regular deals.

Andrew Mason and company are far too smart to rest on their laurels. Saying Groupon is only daily deals and can never be anything else is vastly underestimating this team. Groupon’s future will look far more diverse than many pundits are giving them credit for.

Jeremy Mims is co-founder of OwnLocal, which provides Web-based software for local newspapers and gives them a white-label service for selling online ads, website and social media services to local businesses.