On Friday, Groupon announced the acquisition of Hyperpublic. The two-year-old company, helmed by Lerer Ventures general partner Jordan Cooper, is an open platform for the web’s local data. Hyperpublic’s API, until now publicly available, was filled with all sorts of location-specific data that companies could use to build hyperlocal apps and websites.
The company offered a smart, well-regarded service for developers, but Street Fight columnist Michael Fives wrote in December that Hyperpublic still needed a plan “to figure out just how exactly to monetize all of this data at scale.”
With Groupon’s backing, this issue can more or less be put to rest. Hyperpublic can continue gathering place data under the deals behemoth’s wing, and can potentially provide Groupon with the kind of targeting and specificity that many have criticized it for lacking. In an interview with The New York Times, Cooper, who did not respond to requests for comment, said some of his team will join the biggest daily deals vendor.
The acquisition is a play by Groupon for some of the higher-hanging fruit. It is no secret that the daily deals space is consolidating, and while Groupon and LivingSocial remain the biggest players, they have had to fight hard to keep merchants happy. One of the major criticisms of daily deals has been that while they can bring bargain-seeking new customers in the door, they are not particularly good vehicle for encouraging repeat business. It’s been suggested that data and consumer targeting will help to fix some of these issues, and having access to the extremely specific data that Hyperpublic provides will allow Groupon to much more precisely target offers to its users (and to specific mobile customers in specific places via its instant deals service Groupon Now).
Another key to the Hyperpublic buy lies on the other side of the equation. Groupon, LivingSocial, and all other daily deals companies are focusing on vendor relationships in 2012 — it’s more cost-effective to recruit a vendor once and have them run multiple deals over time than to have three separate merchant acquisitions. Hyperpublic offers Groupon’s merchant partners another reason to stick around and run another deal; presumably the company will ultimately turn around this well of user information to offer vendors information about who is buying what at their store when. As Hyperpublic’s Data on Demand product says: “We have everything. Need Twitter handles of vegans in the East Village? Done. Millions of display ads referencing places in Chicago? Done. You get the idea.” Groupon will now presumably be able to provide data to tout a deal’s effectiveness, and to point out ways to improve future offers.
With its IPO in the rear-view mirror, Groupon is now rightly focused on building value for its new shareholders. Picking up a company whose strength addresses a perceived weakness certainly looks like a good start.
Noah Davis is senior editor at Street Fight. He previously covered media at mediabistro.com and Business Insider, as well as during multiple stints as a freelance writer. He has written for The Wall Street Journal, NYMag.com, Wired.com, SportsIllustrated.com, and many other publications.