If the ongoing “Weinergate”story continues to be a mediasideshow—and if the ongoinginterviews with Rep. AnthonyWeiner (D.-N.Y.) continue toyield more questions than answersabout the lewd picture on hisTwitter account—than thecongressman may just be forcedto step down from the New York City U.S. House seat he has heldsince 1998.whether Wiener runsagain next year or is forced to stepdown, it seems a safe bet to sayRepublicans will make an all-outeffort to win New York’s 9thDistrict in 2012.And could Republicans win it,with or without the embattledWeiner as the Democraticcandidate?“What’s that you’re saying? ARepublican winning in New York City? Come on!” exclaimed BarryFarber, dean of New York radiotalk show hosts and himself aRepublican nominee for Congressback in 1970, when HUMANEVENTS shared that assessmentto him, “Maybe if you weretalking about the old ‘silk stocking district’ in Manhattanand this was forty years ago,when [liberal Republican and laterNew York Mayor] John Lindsayheld it, I’d agree. But New York is so Democratic now, the onlypart of it that will send aRepublican to Congress is StatenIsland [which elected RepublicanMichael Grimm as congressmanlast year]. But Weiner representsBrooklyn, for goodness sake!”Not exactly. For decades, the 9thDistrict was indeed the Brooklyndistrict and the fiefdom of suchprominent Democrats as Reps.Emmanuel Cellar (1926-72),Elizabeth Holtzman (1972-80),and Charles Schumer, who heldthe district from 1980 until hewent to the Senate in ’98. Butrecent redistrict has dramaticallychanged the 9th. It is no longer“the Brooklyn Districtm,” butincludes Brooklyn and a verylarge part of Queens as well. Ithas large swatches of Russian andOrthodox Jews and a growingVietnamese community.The 9th, according to a recentanalysis in National Journal,“trended more Republican thanany other district in the countryfrom the 2000 to the 2008presidential election. Al Gorecarried the district in a landslide,winning 67 percent of the vote.But it gave John Kerry just 56percent of the vote in 2004, astriking 11 point dip. The gainwas largely attributable to voters'strong support of George W.Bush's counterterrorism policiespost-9/11, but four years laterJohn McCain carried the same 44percent of the vote as Bush, evenas President Obama significantlyoutperformed Kerry across thecountry.”Most dramatically, Weiner—whohad always won by margins of 2-to-1—faced the race of his lifelast year from former TVproducer and Madison Avenue adman Bob Turner. Running as anunabashed conservative on theballot lines of the Republican andNew York Conservative Parties,Turner drew a handsome 42% of the vote.“And with the problems Weiner isnow having, he could be toast,”Mike Long, chairman of theConservative Party, told HUMANEVENTS, “The Orthodox Jewishcommunity, which is increasinglyconservative but has always stoodwith Weiner, doesn’t tolerate thiskind of behavior. He’sstonewalling the entire story andit has all gotten worse with thenews that his [Twitter followers]included a large list of younggirls.”Long and others in New York agreed that Turner’s recordRepublican showing gave theformer “Mad Man” first crack atthe Republican and Conservativenominations in ’12. Anotherintriguing factor is that with theappointment of DemocraticAssemblywoman Audrey Pfefferas Queens County Clerk, therewill soon be a special election tofill her 23rd District legislativeseat. The Republican andConservative Parties are alreadyrallying behind District GOPLeader Jane Deacy as theircandidate. Although the date of the election has yet to be called,many are predicting that the 23rdDistrict race will be the “dressrehearsal” for an all-outRepublican effort to win the 9thDistrict next year, with or withoutWeiner.So the “general assumption” haslong been that a Republican couldnever go to Congress in NewYork City except in Staten Island.That assumption, however, didnot factor in the changed politicallandscape—or “Weinergate.”This entry passed through theFull-Text RSSservice — if this isyour content and you're reading iton someone else's site, please readthe FAQ atfivefilters.org/content-only/faq.php#publishers.FiveFiltersfeatured article:YouCannot Kill An Ideology With AGun.
There was a lot of snickeringThursday after Grouponannounced an IPO valuing it at$30 billion. But the companymight actually be worth a lot morethan people think.It didn’t take long afterGrouponfiled for an IPO Thursday thatvalued the company at $20 billionfor the snark to start flying aroundthe web.“$GRPN 's S1 can be boiled downto: ‘we don't really have a bizmodel, we'll try some stuff & willlose money for yrs’ ..can ya' spare$750M?”saidone tweeter. “Can'twait for the $LNKD/$GRPNmerger: one email offering a half-price dinner at a place I don't likew/ someone I don't want to see,”saidanother.We get it. On the surface,Groupon looks like a dodgyproposition. Sure, it’s hadphenomenal growth (from152,000 subscribers and 212merchants in June 2009, to 83million subscribers and almost57,000 merchants worldwide inMarch of this year). But importantquestions persist about itsunderlying fundamentals.All of which leads to thequestion: Is Groupon the nextWebvan, madly overvalued andultimately unsustainable? Or is itthe next Google, underestimatedby some (at the time of its IPO),but nevertheless poised tocompletely transform an industry?The Webvan ArgumentWebvan was the deliverycompany back in the go-go yearsof the early Internet that allowedyou to order groceries online andhave them delivered in a precisehalf-hour window. Customersloved the idea, but the model wasultimately unsustainable. Webvanpoured huge amounts of moneyinto infrastructure, but eventuallywent bankrupt.Those skeptical of Groupon’sfuture prospects sense the sameshakiness in the coupon seller’smodel. Despite its amazinggrowth, it’s still not profitable. Itbrought in $713 million inrevenue last year, but still lost$413 million, according to thecompany’sS-1 filing.Add to that the skepticism thatGroupon’s model can survive.Much of the company’s growthlast year was due to its massiveexpansion into new markets. Butit’s not clear how many merchantstrying Groupon for the first timebecome repeat customers.The S-1 filing says there’s somuch demand on the merchantside that in some markets, thewaiting list to get vetted is ninemonths long. But it doesn’t talk about how many of thosemerchants come back. Andmeanwhile, horror stories persistabout merchants who give theservice a shot, have terribleexperiences, and vow never to gonear the service again.All of which begs the questionthat’s been rattling around formonths: Does Groupon have legs?Will it be able to survive once thenovelty wears off? Will it be ableto craft a sustainable business?If you look at Groupon based onwhat it is today, the answerprobably is No. The customeracquisition costs involved in amodel based on deep discounts istoo high for many localmerchants, and the targetting tooimprecise. In the long run then,this theory says, Groupon won’tbecome a viable marketingchannel for local merchants, andits core business will dry up.Which is possible.But there’s another narrative,which could lead to an entirely
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different conclusion. And it goessomething like this:The Google ArgumentThe worldwide market for localadvertising is huge--in thehundreds of billions of dollars.Anyone who can figure out howto grab a meaningful slice of thatpie stands to make a pretty penny.You’re not going to get very far,of course, if the only advertisingproduct you can offer are deeplydiscounted coupons spread abouthelter skelter. But what if youradvertising products could helpmerchants solve the conundrumthey struggle with every day: howto move specific inventory, tospecific customers, at specifictimes? Now, that might actuallybe worth something.Here’s a very simple example.Imagine you own a bakery.Maybe you have lots of foottraffic in the morning, as peoplepick up their coffee and muffins.And maybe also on the weekends,when there’s big demand for yourtarts and baguettes.But how about on weekdayafternoons, from about 2 p.m. to 5p.m.? It’s probably pretty dead.The hourly revenue plummets, butthe fixed cost remains the same.What you'd really like, then, is away to move inventory duringthose specific hours.As it turns out, Groupon may beable to help.Lost in all the frenzy over theIPO announcement Thursday wasa small sliver of news about a newGroupon service:Groupon Now.Merchants can now dispatchoffers that are available right now,for a limited time (like the one atright).So let's say Groupon fleshes outthis service to its maximumutility. And let’s say you're back in your bakery, it’s 2 p.m., andyou discover your bakery has toomany chocolate chip cookies leftover. You know from pastexperience, you’re not going to beable to move them all. But what if you could now go online andwhip out a deal: "Good until 4p.m. today: Buy a regular-priceddrink and get two chocolate chipcookies for the price of one."Meanwhile, Groupon users in thisnew world have set up alerts to letthem know when there’s a gooddeal going on right now, in theirgeneral vincinity. So now youhave 20 people who grab thatGroupon and march over to yourbakery for an afternoon pick-me-up. Your bakery moves thecookies, sells a bunch of extradrinks that it wouldn’t have soldotherwise, and maybe moves afew tarts and baguettes as well. Adowntime that would have seenexcess inventory go to waste nowsees bustling business.So what if Groupon created awhole suite of products thatserved this purpose? You’d have asystem that could help clothingstores move blouses that weren’tselling, theaters sell last-minuteseats to shows that hadn’t yet soldout, arts-and-crafts stores to targetstay-at-home moms during slowweekday morning hours.Carry all of this to its logicalconclusion, and here's what youhave: An advertising system thatenables merchants to move theinventory they want to move, tothe customers they want to moveit to, at the time they want tomove it. What does that look like?A new, powerful variation onAdWords.Groupon’s IPO contains clues--albeit opaque ones--that thismight be where it’s headed. "Weuse our technology and scale totarget relevant deals based onindividual subscriberpreferences," the S-1 reads. "Aswe increase the volume of transactions through ourmarketplace, we increase theamount of data that we have aboutdeal performance and customerinterests."This data allows us to continue toimprove our ability to helpmerchants design the mosteffective deals," the filingcontinues, "and deliver deals tocustomers that better match theirinterests."The S-1 also talks about the hugeeffort Groupon is making inacquiring subscribers. It spent$263 million last year onmarketing. That's a big chunk of change, but it also dovetails witha strategy geared toward helpingmerchants find the exact types of customers they’re looking for.The larger pool of customers todraw from, the more likely anyparticular merchant is going to beable to find the subset they'relooking for.And in his letter to investors,cofounder and CEO AndrewMason hints at new offerings tocome: "We are pursuing modelsof reinvention that would not bepossible without the critical massof customers and merchants wehave achieved."Still feeling skeptical? Thenconsider this: A couple of monthsago, Groupon nabbed for its newCOO Google’s former vicepresident of sales operations, awoman named Margo Georgiadis,who, as it turns out, wasresponsible for driving not onlysales operations across variousregions and channels but who wasalso responsible for thetechnology teams thatcommercialized AdWords,AdSense, and displayadvertisements to advertisers andpublishers.What We Think On the surface, Groupon candefinitely look like a massivefolly. (It’s hired almost 1,000writers, after all, to pen Grouponads. Surely that can’t besustainable.)At the same time, the companydoesn’t seem to be standing still.It’s talking to its customers (themerchants), learning what theyneed, and trying to designproducts that help them. If it doesindeed create ways that delivermeaningful results for merchants--and can do that in a financiallysustainable way--then it doesindeed stand a chance of--if notactually assuming Google’smantle--at least being as good abet as the search giant was whenit IPO’d back in 2004.One Last ThingAttitude is not everything, but it'salso not nothing. And Masondemonstrated a Google-likeattitude in a letter he wrote toinvestors as part of S-1. "We areunusual and we like it that way,"theMork of social startups writes."[W]e vowed to make Groupon aservice that people love using…nothing [will] be as crucial to ourlong-term success as happycustomers and merchants,” Masoncontinues."When we see opportunities toinvest in long-term growth, expectthat we will pursue themregardless of certain short-termconsequences," he says. "Expectus to make ambitious bets on ourfuture that distract us from ourcurrent business. Some bets we'llget right, and others we'll getwrong, but we think it's the onlyway to continuously builddisruptive products."It’s not quite "Don’t be evil" and"we do not plan to give earningsguidance in the traditional sense,"as Google founders Larry Pageand Sergei Brin wrote in theirletter to investors back in 2004.But it’s not too far off either.[Homepage image:GroupononFlickr]E.B. Boyd is FastCompany.com'sSilicon Valley reporter.Twitter.Email.