Cue the Groupon backlash! Despite a series of fumbles this year (a botched New Year's deal in Japan, a controversial Super Bowl ad, a "confusing" FTD Flowers deal), the online deal website is poised to go public with the incomprehensible estimated value of $25 billion.
Therefor, clearly, it is time to turn on the hate: is Groupon hurting the businesses its trying to help? Or are there so many Groupon clones that it doesn't even matter?
Slate wonders if the Groupon model isn't a little bit too efficient, and if it will eventually "cripple the merchants that rely on it." Businesses sign up for Groupon on the premise that the deals lure new customers who will then become loyal customers willing to pay full price. But as more and more deals are offered and people get used to the cheaper prices, will businesses be forced to constantly cut into profits to offer new deals?
Of course, that assumes that consumers actually continue using Groupon: a slew of clones has diluted the market, and their traffic is down 13 percent since the beginning of the year. Also, the site's COO Rob Solomon is leaving the company, which Groupon swears is "absolutely not" related to any of these issues.
· The Groupon Paradox [Slate]
· Dealed Out? Traffic to Deal Sites Dropping [Chicago Breaking Business]
· Groupon President and COO Solomon Leaving Company [Chicago Breaking Business]
· All Groupon Coverage on Eater [-E-]