Groupon: Spending $1.43 to make $1.00

David Heinemeier Hansson at Short Logic:

Groupon has filed its S-1 and hopes to raise $750M in its initial public offering. Given they’re currently losing a staggering $117M per quarter, despite revenues of $644M, they’ll be burning through that cash almost as soon as it hits their account. At the moment, it’s costing them $1.43 to make $1, and it doesn’t look like it’s getting any cheaper. They’re already projected to make close to three billion dollars in revenues this year. If you can’t figure out how to make money on three billion in revenue, when exactly will the profit magic be found? Ten billion? Fifty billion? My wife shops Groupon a lot. I do not. Partly because I feel I don't need to spend money on most of the things they offer and I know if I simply ignore Groupon, I will save money. I feel the bottom is going to drop out from under Groupon in a few years and everyone in the tech media will raise their hands and run around shouting about how no one saw this coming, how could this happen, etc. For the record, I saw it coming. ( 1:00 PM June 3, 2011 - for future reference)

Motorola Admits Open Android Store Means Low Quality Apps

Nancy Gohring, IDG News:

Motorola’s CEO blamed the open Android app store for performance issues on some phones. Of all the Motorola Android devices that are returned, 70 percent come back because applications affect performance, Sanjay Jha, CEO of Motorola Mobility, said during a webcast presentation at the Bank of America Merrill Lynch Global Technology conference on Thursday. Unlike most other mobile app stores, the Android Market is totally open, meaning anyone can upload an application to the store. While Google removes applications that are found to be malicious, there is no mechanism for ensuring that applications perform efficiently. “For power consumption and CPU use, those apps are not tested. We’re beginning to understand the impact that has,” Jha said. You're just now beginning? Where the heck have you been for the past 2 years?