Groupon, the privately-held social buying service, just sent out an email to subscribers with the subject line promising a "Super Groupon" that provides the buyer with a $20 credit at Barnes & Noble (NYSE:BKS) for $10 (click to enlarge image):
Barnes & Noble seems like they are trying to capitalize on rumors of the possible bankruptcy of their main brick-and-mortar competitor, Borders (BGP). Earlier this week, Borders shares fell about 50% after Bloomberg published news stating that "people familiar with the matter" said that Borders may file for bankruptcy protection as early as next week.
The first point, which has become increasingly clear over the past few years, is that Barnes & Noble is playing to win in the war for brick-and-mortar media sales. They successfully brought an e-reader to market (the Nook) that has managed to differentiate itself from other offerings (Amazon's (NASDAQ:AMZN) Kindle and others) to remain relevant to tech-conscious consumers, and have kept a strong balance sheet during the process (while Borders teetered on the brink of bankruptcy). They are now proverbially kicking Borders while it's down by providing this offer.
Barnes & Noble will lose money in the short-term on this Groupon; not only are they selling a lot of merchandise at half-price, but Groupon takes a cut of the $10 face price, leaving Barnes & Noble with something like $5-8 of cash from the $20 of merchandise that the coupon buys. This must mean that Barnes & Noble is very comfortable where it is right now, and that it's bold enough to take a risk and spend some money to hopefully win a lot of its competitor's customers.
The second theme is that Groupon is becoming a very important marketing tool, even for large, nation-wide companies. In just a few short years, Groupon has gone from nothing, to providing customers with local deals from mom-and-pop stores seeking exposure, to providing national (or global) companies with a means of reaching out to tens of millions of customers. Many observers questioned Groupon's decision to not accept Google's (NASDAQ:GOOG) buyout offer... but Groupon just continues to do even more impressive things.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.