Groupon may have had first quarter revenue of $559.3 million,
but its larger legacy may be creating the daily deal
LivingSocial, SweetJack and countless other sites have
followed in Groupon's footsteps since the site opened in 2008,
offering daily deals to anyone with an email address. Some have
copied the model with more finesse than others - Nopuorg, Groupon
spelled backwards, may be the most obvious imitator.
International companies have gotten in on the sales. Biglion, in
Russia, sells daily deals.
Early in 2011 Gropon sued Scoopon, an Australian deals site
that had originally been in talks to sell itself to its American
counterpart. It attracted Groupon's attention through the
acquisition of groupon.com.au, possibly hindering the site's
ability to expand into Australia.
"We don't spend a lot of time worrying about people whose
primary competency is their ability to carbon copy something,"
Groupon founder Andrew Mason said in a 2010 interview with
Many narrowly focused local deals sites have sprung up, and
then consolidated. New York City site Scoop St., Chicago's
DealADayOnline and San Francisco's Swoop were all purchased by
BuyWithMe in 2011.
Local media sites are especially expanding in this arena as
many of them have been struggling with decreasing print ads and
low-revenue online ads. Deal Chicken has partnered with several
newspapers, such as the Des Moines (Iowa) Register and the
Asheville (Tenn.) Citizen-Times, to offer daily deals on their
Even as the industry expands, it is gaining a bad reputation
among small business owners, many of whom gain new customers, or
are overwhelmed by one-time customers who buy the deal.
One UK baker had to make 102,000 after offering a Groupon for
75% off a dozen cupcakes, selling 8,500 coupons.
"Without doubt, it was my worst ever business decision. We had
thousands of orders pouring in that really we hadn't expected to
have. A much larger company would have difficulty coping," Need a
Cake bakery operator Rachel Brown told Mashable late last year.
She lost up to £12,500 ($20,000) on the deal.
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