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There’s been much hype, crazy valuations, and overall market excitement about businesses that promise to unleash the power of the social graph, location, recommendations and group buying.
Facebook’s latest valuation according to SecondMarket is now about $30 billion, Foursquare raised $20 million at a post-money valuation of $115 million while still at a pre-revenue stage, Yelp, short of selling for $550 million to Google, raised over $25 million at an undisclosed but very high valuation, and finally Groupon raised $135 millionat a whopping $1.35 billion valuation. So besides their huge success with the investment community, and their users, what do these companies have in common, and what does all this have to do with disrupting Local Commerce?
In an August TechCrunch guest post, Alex Rampell, describes how Online2Offline commerce is a potential trillion dollar opportunity. The gist of it is that we spend most of our disposable income offline, in local stores, restaurants, and shopping malls. But companies like Groupon, Gilt, and other group buying and private sale startups are changing the money flow. People buy online, and redeem offline. But this is just the beginning of a perfect storm brewing that will change the way we discover, shop, and pay for things. Let’s focus on the main function each of these different startups provide to understand how bringing them together will ultimately disrupt multiple trillion dollar industries:
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