Now, after a spectacular debut on the Nasdaq, Groupon is a public company. On Monday, it reported its second-quarter earnings results. The numbers were dismal. They paint an unmistakable picture of the future of Groupon and other similar sites: The daily deals industry is drying up. Groupon reported that its customer growth slowed substantially over the second quarter; the amount of money that each customer spends on the site tanked; and the company’s “guidance” for the current quarter suggests that things are going to get a lot worse. The spin from Groupon’s executives was not very encouraging. In a conference call with analysts, the firm’s CEO Andrew Mason kept talking up Groupon Goods, a service in which Groupon sells discounted merchandise to customers—in other words, something completely different from the coupons that earned the firm its IPO.
We were at a restaurant the other day and ended up chatting with the (new) owner. She told us that the previous owner had basically run the place into the ground - despite having a full house day after day. The reason? He never met a "deal" hawker he didn't like.
So night after night he packed in customers, offering two for one specials, group buy menus etc. and neglecting to make sure that the costs of goods and services provided were lower than the revenues collected.