stories filed under: "mercata"
Mon, Apr 19th 2010 7:33pm
A startup called Groupon recently brought back some memories of the dot-com bubble when it announced that it had raised a $135 million round of financing, reportedly at a valuation of $1.35 billion. The company offers users in different cities the ability to join a group to buy coupons or discounts from a local business. If enough people join in, everybody gets the deal; if the magic number isn't reached, nobody gets it. In addition to the VC round, the business model is straight out of the bubble, and is pretty close to one used by Mercata, a Paul Allen-backed company that failed back in 2001. Apparently, Mercata garnered a dozen patents based around group buying, and they've now been sold to a Groupon rival called Tippr. That company's CEO told GigaOM that he plans to enforce the patents, but he believes "that patents are primarily a defensive weapon, not offensive." It's not entirely clear how those two statements can be reconciled, but he assures us that he's not a patent troll. In any case, it's hard to see how this situation really benefits anybody (apart from the lawyers), as it foreshadows a lot of money and other resources being devoted to a patent fight -- resources that would be better spent elsewhere.