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Groupon lost the coupon

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Just before Groupon gets public, the comany is under hammer from all corners.

In the year 2008, bunch of music lovers and no tech savvy young boys and girls started Groupon in Chicago for offering coupon discounts for the deals.

Though “Deal of the day” sites are nothing new for internet, the company had a boom in a very short time. Call it their luck or the smartest, grouping sort of reincarnated an internet boom within an internet. Deals grew, visitors grew, so did merchants.

The theme was pretty simple. Merchants pay half price to get customers with view that , satisfied by their services, the customer will be back again with full price. And they did.

But than as with every boom, many be rich in a day internet sites just came with a copy cat theme. If a bunch of street musicians can earn money, why not us. Internet was flooded with coupon sites and discounts.

The merchants started feeling the heat. A customer once ailing the coupon from a site will now get it from another site. It is no more the brand that mattered. At the end of the day, you are getting it in pennies.

With a huge customer base and buzz in internet and social network, Groupon decided to go public. Last December Google offered us 6 billion for Groupon take over, which was snubbed down by the coupon site saying it was worth more!

The price was rising a billion dollar every week. And they submitted their financial document this June.

That revealed the void behind the claims. 80% of Groupon subscriber never purchased from it….. When a customer pays 50% of the amount for a deal, the site keeps its 50%. Leaving the merchants offering services and products at as low as 25%.

It neither helped the merchants retaining their brand nor was it of any help of getting loyal customers.

Result? Loss of interest. And it was pretty evident by the fact that Facebook backed off from its plans to go ahead with its own coupon deal.

The criticism could not be answered by Groupon due to legitimate ban of any press statements or public statement release prior to going public.

News from amazon,s lackluster performance in New York did subdued deal market.

In metros like new York and chicago, you can not remove coupons completely due to stiff business competition but that does not equate a company like Groupon with 40 billion valuation.

As it stands now, Groupon is on the verge of getting its own deal, a discount of 75% in its share value probably?
And the way news are coming from wall street fortune makers, Groupon may not get the deal either!

Another internet Issue, but this time analysis went early which might save many people probably from loosing their life time saving.

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