walkman - 1:48 am on Jun 6, 2011 (gmt 0)

@ weeks
You picked an extreme. Software is another thing, Symantec for example can probably sell it's antivirus even for $3 if a billion people buy it but most of the Groupon deals are labor intensive. Someone has to be there and provide the service, massage, do nails, cook or whatever.

Rogerd, ask a restaurant owner how much they like those types of deals and customers :). Restaurants a step away from bankruptcy used to get some advance cash in addition for groupon like deals with a certain credit card. I think it was Discover but it was an act of desperation on the restaurant owner's part. Their margins are quite thin and up-selling just doesn't work on certain segment of population. Restaurant margins are, what 10% at best, with full prices so it's a huge hole to climb out with Groupon deals.

Like I said before, the problem is not that they will not find business, but no where near enough to justify a $15 billion or worse, a $25 Billion valuation. Unless the groupon service has repeat customers, it's over.