Home > Uncategorized > MSNBC.com: “How many Groupon rivals? Try 600” & Forbes.com: “Groupon’s MySpace Moment?”

MSNBC.com: “How many Groupon rivals? Try 600” & Forbes.com: “Groupon’s MySpace Moment?”

In the press arena, the bad news continues for Groupon.  And from a growth perspective, the percentages are dwindling fast.  To me, it’s fairly obvious where this will end for this new rocket.  Below the Forbes story are a few more tuff-to-ignore articles exposing the challenges ahead of Groupon …


How many Groupon rivals? Try 600

With few barriers to entry, daily deals market sees huge churn

By Jessica Mintz
msnbc.com contributor
updated 8/26/2011 9:37:29 AM ET

The barriers to entry for wanna-be-Groupons are very low. There are numerous companies selling the technology and support required to get a site up and running, and entrepreneurs on even the tiniest budgets can put something together with an inexpensive blog template. Find a few local businesses willing to offer a deal, write some snappy copy and you’re officially a group-buying site.

Yipit, which aggregates offers from many sources and analyzes the daily deals market, says more than 300 Groupon-esque companies have come online just this year, with names like  Heartsy, Waggy Swag and MarketSharing, while 130 have closed their virtual doors.

The explosion of deals is good for shoppers with a high tolerance for a full inbox. In New York last week, for example, an ambitious bargain hunter could have chosen from among more than 180 offers, according to Yipit.


Groupon’s MySpace Moment?

Erika Morphy, Contributor
8/27/2011 @ 11:03AM |444 views

MySpace Moment, sooner or later, is going to enter the Merriam-Webster’s Collegiate Dictionary alongside crowdsourcing, bromance and cougars. It is a fact that once seemingly invincible brands can inexplicably decline in popularity so let’s give this depressing phenomena a name so we can say, oh, I don’t know, Groupon may be nearing a MySpace Moment.

Which it may be.

Something is amiss: The Securities and Exchange Commission frowned upon – and legions of accountants mocked – its Adjusted Consolidated Segment Operating Income metric in its first filing. It inflated the company’s worth by ignoring marketing costs. Groupon subsequently amended its filling.

It posted a net loss in the second quarter (although much of that was related to the hiring of more than 1,000 employees).

Now Experian Hitwise is reporting a significant drop-off in Groupon traffic this summer, nearly 50% since its peak in the second week of June 2011 compared to last week.

During the same time, Living Social has achieved 27% growth in visits to its site.

These are just two data points, of course, and they ignore the formidable assets that Groupon does have – namely its email mailing list, which CEO Andrew Mason pointed out in a recent internal memo to employees (the only way the company has to defend itself now that it is in a quiet period) and head start in this market and name recognition.

It has also been pushing into real time mobile offerings with Groupon Now.

And it’s not that other sites don’t dip in traffic every now and then – or even fail to turn lagging initiatives around. Remember Google’s social media efforts pre-Google+?

Or eBay’s diversification away from the auction model

Are Daily Deals Sustainable?

In fact eBay is a good company to point to right now. Ten-fifteen years ago, it was auction-everything thanks to eBay’s wild popularity at the time. To be sure, there is still a market for that business style but as eBay itself has shown with its emphasis on fixed-pricing, it is better to diversity into other categories as well.

So may it be with the daily deal model. Doubts are growing whether its current form is sustainable – by that I mean, will there be enough consumers to fuel the 400 plus daily deal offerings in the long run? Or merchants, for that matter?

One point made by Experian Hitwise that does not bode well for Groupon or the model is that overall visits to a custom category of Daily Deal & Aggregator sites were down 25% for the same time period.

Also, it noted PriceGrabber released results from its Local Deals Survey in June, stating that 44% of respondents said they use or search daily deal Websites. “However, 52% expressed feeling overwhelmed by the number of bargain-boasting emails they receive on a daily basis.”


Amazon’s Got a Deal for New York

August 24, 2011, 6:20 pm

“One thing AmazonLocal can do, which Groupon and other deals sites cannot, is promote still more deals on Amazon itself. Under this part of the venture, which is due to be phased in over the next couple of months, AmazonLocal subscribers will be able to buy coupons for discounts on select items (certain watches or jewelry, for instance) on Amazon’s own sites.”


What Groupon’s CEO Didn’t Tell His Employees in That Memo

By Erik Sherman | August 26, 2011


LivingSocial Faces Groupon-Style Expiration Date Lawsuits

Consumer protection laws ban expiration dates of less than five years on gift certificates

08/29/2011 | James R. Hood | ConsumerAffairs.com


Groupon’s IPO Prospects May Be Punctured

Consumer protection laws ban expiration dates of less than five years on gift certificates

August 28, 2011  | John Tobey

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