(This article was originally published at Big Data, Plainly Spoken (aka Numbers Rule Your World), and syndicated at StatsBlogs.)
I just did a guest lecture at a New School journalism class. While preparing for the class, I pulled the sad stock chart for GRPN (Groupon):
If you bought the hype in 2011, you'd have lost 70% of your investment ($25 to $7).
Given what we know today, it's hard for people to feel the hype that the media helped fuel in those days. As a reminder, here is the New York Times's David Pogue gushing about Groupon, just before its IPO: link. Pogue was one of many such commentators.
Around that time, I had this response to the Groupon boosters. There was a gaping hole in the win-win-win story from the start. Retailers are giving up sure profit for the probability that the coupon-users are not dealseekers and would come back for repeat business, at a higher price.
This is related to my current concern about the so-called "gas price stimulus". The hit to the oil and gas sector is immediate and certain. The shift of spending to other sectors, and the associated "multiplier effects", is a probability of multiple events occurring in the future.
Please comment on the article here: Big Data, Plainly Spoken (aka Numbers Rule Your World)
