Ah, revenue. Yes, I remember this from last time round; revenue is what matters, regardless of the costs involved in producing that revenue, or its uncertain future footing. Right.
"To demonstrate the economics of our business model, we have compared the revenue and gross profit generated from the North American subscribers we acquired in the second quarter of 2010, which we refer to as our Q2 2010 cohort, to the online marketing expenses incurred to acquire such subscribers. The Q2 2010 cohort is illustrative of trends we have seen among our North American subscriber base. The Q2 2010 cohort included 3.7 million subscribers that we initially spent $18.0 million in online marketing to acquire in the second quarter of 2010. In that quarter, we generated $29.8 million in revenue and $12.8 million in gross profit from the sale of approximately 1.2 million Groupons to these subscribers. Through March 31, 2011, we generated an aggregate of $145.3 million in revenue and $61.7 million in gross profit from the sale of approximately 6.3 million Groupons to the Q2 2010 cohort. In summary, we spent $18.0 million in online marketing expense to acquire subscribers in the Q2 2010 cohort and generated $61.7 million in gross profit from this group of subscribers over four quarters."
They are seeing >3x profit on typical cohorts, so they decided to buy as many users as possible (which is smart).
From last time around? In the 90s? I don't. Then, it was all about subscribers/visitors, with the murky promise to monetize somehow.
And many of the startups then that DID post revenue were involved in quasi-illegal quid pro quo scams where Startup A invests in Startup B with the understanding that B will use that newfound capital to purchase from A.
