Groupon Wants to Be Big With Small Business

The company makes a move into the online payments space

   

Last week, Groupon (NASDAQ:GRPN) acquired FeeFighters, which provides online comparisons for small-business payment providers, for an undisclosed price.

The deal wasn’t loudly celebrated, but this move and others might mean that Groupon wants to be a broad-based provider of services for small businesses — not just a daily-deals operator.

And that might be a prudent move, considering the difficulties Groupon has had in trying to reach a profit. The small-business segment is enormous and has boosted the fortunes of top companies like Intuit (NASDAQ:INTU) and ADP (NYSE:ADP).

I actually met up with FeeFighters’ founders when they got started three years ago and thought they put together a good platform. But I was a bit skeptical about the market opportunity — FeeFighters’ service was really a one-time feature for most small businesses. To deal with this, the company went on to create its own online payment system, called Samurai.

By being a part of Groupon — which has more than 30 million active users — FeeFighters should get lots of traction, and the payments system could be a lucrative revenue stream.

The FeeFighters deal comes on the heels of the acquisition of OpenCal. This transaction became the basis for the recently launched Scheduler service, which helps small businesses keep track of reservations. It’s kind of like OpenTable (NASDAQ:OPEN). Similarly to FeeFighters, Scheduler should get a nice boost from Groupon’s massive user base.

For Groupon, deals like these and an overall shift to a broader business could be the ultimate launchpad to get the company to profitability.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook”“All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.


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