I'm surprised by the loss they are running. Think how big their cut is. My understanding is that on a 50% off deal, they get half of the merchant's take! Granted their effective cut is lower since they provide some costly/valuable services .. e.g. they pay you right away while redemptions might happen over months. But still ...
I wonder if merchants aren't just curious about the groupon model as opposed to groupon having "cracked the local nut". I guess we'll know in 2-3 years. If their revenue flattens or goes down vs if it keeps going up up and up.
On a side note, I hope this makes Facebook file for their IPO already. For some reason, I feel the Facebook IPO will be a turning point of sorts in the current tech boom. Not sure why though.
> Granted their effective cut is lower since they provide some costly/valuable services .. e.g. they pay you right away while redemptions might happen over months. But still ...
How is that at all costly? Groupon receives money up front--say $20 for a $40 coupon and then pays half to the merchant ($10 in this case). The customer is the one floating it--Groupon has theirs, the merchant has theirs.
They spend a ridiculous money on advertising and sales, so it's not too surprising too me. Their products are "free", but having a staff of 7,000+ means a tons of boots are on the ground to shake out those deals.
I wonder if merchants aren't just curious about the groupon model as opposed to groupon having "cracked the local nut". I guess we'll know in 2-3 years. If their revenue flattens or goes down vs if it keeps going up up and up.
On a side note, I hope this makes Facebook file for their IPO already. For some reason, I feel the Facebook IPO will be a turning point of sorts in the current tech boom. Not sure why though.