Is Google trying to copy Groupon?
A lawsuit filed by Groupon alleges two former employees brought confidential company information to their new positions at Google Offers.
The civil complaint was filed this week in an Illinois court. Groupon seeks a court order to prevent former employees Michael Nolan and Brian Hanna from sharing important company information with Google.
?These lawsuits are fairly common,? said Peter Krasilovsky, vice president at local media research firm BIA/Kelsey, Chantilly, VA. ?The question is really, what does Groupon have that Google might be able to take or steal??
?There may be some systematic approach that Groupon has taken that Google might want to copy,? he said. ?It may not be an issue of grabbing the names as much as the system for segmenting and targeting lists.?
Groupon declined to comment for this story, saying it does not comment on legal matters. Google did not respond by the press deadline.
Google launched its Google Offers daily deals service earlier this year and the service is currently available in New York, San Francisco, Portland, OR, Austin, TX, Boston, Denver and Seattle.
?Groupon and Google are competing head to head in the limited markets that Google is in,? Mr. Krasilovsky said. ?Google is beginning to grab some share but it is a wide open space.?
The search leader?s push into daily deals comes at a time when other daily deals offerings are being scaled back, which Yelp did recently, or shutdown, as Facebook did with its deals service.
Mobile plays a big role for each company, with a significant number of mobile users accessing Groupon deals via mobile while Google?s mobile interests include advertising, daily deals, the Android operating system and handsets via its recent acquisition of Motorola.
Google has some advantages in the competitive daily deals space. It has a credible brand, a set of features that might plug into deal marketing and the ability to highlight deals on the Google homepage, something it recently tried in New York.
Despite these advantages, Groupon is still a significant force here and the suit suggests that Groupon may be afraid Google wants to leverage some of the daily deals giant's successful strategies for its own purposes.
Groupon has several notable advantages over its competitors, which it may be trying to protect with the suit.
?Groupon has assembled a really impressive marketing list, by far the largest in the field?s industry,? Mr. Krasilovsky said.
?They have also been able to figure out how to target customers based on buying habits, geography and special vertical interest,? he said.
While Groupon is the market leader, it is facing questions over how the company will sustain growth and recently postponed an initial public offering. The IPO is now scheduled for next week, with Groupon offering just 5 percent of its total shares.
?The lawsuit puts a potential cloud on Groupon?s unique status in marketing to its customers if the market believes that Google can easily copy its strategic advantages,? Mr. Krasilovsky said.
Google is not named in the suit.
The suit may not have a large impact on either Groupon or Google but it does demonstrate how competitive the daily deals space has become.
?Many high tech employees have employment agreements that prohibit them from using their former employee?s proprietary information when they move to a new employer,? said Jason Koslofky, an attorney with ArentFox LLP, Washington.
?These types of issues seem to have become more noteworthy in the past few years as companies like Google, Groupon and Facebook grow,? he said. ?These companies are not only adding employees from other companies, but they are also losing employees to those same companies.?
Chantal Tode is associate editor on Mobile Marketer, New York