The Power of Social Media

Blogosphere Delays the Groupon IPO.

Conor Sen writes about the delay to the Groupon IPO on Minyanville in an article titled "SEC's Investigation of Groupon a win for the Blogosphere.http://www.minyanville.com/businessmarkets/articles/sec-groupon-groupon-ipo-internet-companies/7/28/2011/id/35983

The Groupon business model seems so clear to me. A company offers a big discount to potential customers, Groupon distributes the coupon and collects a fee. It seems so simple. Apparently the accounting practices at Groupon, discovered by and amplified by the blogosphere, are now being reviewed by the Security and Exchange Commission (SEC).

Companies need to be aware that their S1 filings, and any other legal filings, press releases, formal or informal marketing materials, or even basic customer service interactions are subject to public review. Groupon's filing was shredded by a Social Media audience that is outside of their control. Yelp provides a controlled environment for feedback, but the web provides a platform for many people to voice their opinion. As Sen correctly concludes " The information walls have really come down."