Saturday, August 13, 2011

Groupon "the myspace of daily deals"

Groupon - the daily coupon company, is desperately trying to hang on until its investors can unload their stock via the firm's IPO in September.  The basic business of Groupon is unsustainable - the firm subsidizes deals on the grounds that doing so builds a loyal customer base.  But people who chase coupons are notoriously fickle - they'll switch to whoever has the best deal.

 In reality though, the daily deal space is becoming very crowded with some deep pocket players including Google and Amazon wading in.  Groupon doesn't have a hope.  For a full analysis, see an article in today's FT, which gives a thorough takedown of Groupon's "business model".  This will be an interesting IPO.