

Spawn of Groupon  - tptacek
http://www.slate.com/id/2280963/pagenum/all

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tptacek
Interesting perhaps because of its naivete; takes as part of its thesis,
"Group coupons are nothing but a souped-up iteration of a very old phenomenon:
Plain old coupons date back to the 19th century, if not earlier". This seems
(unless I'm crazy) totally wrong. Classic coupons have purposes beyond
promotion; for instance, capitalizing on price insensitivity. Classic coupons
rarely offer huge discounts, or, if they do, they do it for a loss-leader
product (and they do it infrequently).

Groupons offer huge discounts for a business' core offering for the sole
purpose of attracting new customers. They're purely a promotion mechanism.
They're a big deal not because coupons needed modernizing, but because they're
a means for local businesses to cut out a middleman in promotional costs and
spend that money directly on prospective customers.

Also, it's hard to take seriously a competitive analysis that doesn't
recognize the network effects of group coupon sites; it's a winner-take-most
market with a capital-intensive customer acquisition model (they're doing
direct sales to tens of thousands of local businesses).

