Groupon in China: Oops

Remarkable - am sure this would make a great textbook case study of what not to do at some point. No idea what they were thinking, but I have to imagine they have some amazing offices (TechCrunch):

This all matters greatly for potential investors, because as the S1 showed, much of Groupon’s warchest of venture capital has gone to its aggressive international expansion. As we reported last week, Groupon’s U.S operations lost only $10.4 million last year, whereas the international operations lost $170.6 million.

Much of that has gone to China. Five days after Groupon’s January near-$1 billion venture round was raised, a job board advertising Groupon positions in China boasted “near endless” resources from that round to build out the office. Reading that ad and looking at how Groupon has done in China, one could argue not all that money was, shall we say, judiciously spent. A more blunt way of putting it would be Groupon’s China team made drunken sailors look fiscally responsible.

Despite Mason’s blithe statements to the contrary on stage at All Things D, China is not going well for Groupon. In fact, by all accounts, Groupon has made every classic Silicon-Valley-Web-company-enters-China mistake in the book: Sparring with its local partners, putting foreigners who have little understanding of the local market in charge, and focusing hiring on bankers and international MBAs, not locals.