Groupon could be worth $25 billion -- or yours for $10 if you and 100 others buy before the end of the day
Sorry, I couldn't resist.
People are hyperventilating that Groupon could be worth $25 billion in a possible IPO.
Me? Personally, I don't get the hype. Groupon is in a business with a low entry barrier with tons of competitors nipping at their heels. Plus, I'm not so sure they can keep the momentum rolling. I've read stories of retailers and restaurateurs having trouble with the Groupon effect -- where they sell tons of coupons but make almost no money and in some cases actually lose money.
Plus, Groupon and similar couponing companies are partly dependent on a fair share of consumers actually NOT cashing in their coupons at establishments. This means that the more coupons you buy and don't use, the better off these companies and retailers are, because they pocket your money without giving you the product or service. If all of a sudden everybody starts redeeming their coupons, well, the business model gets upended.
Moral of the story: if you buy a Groupon or a Living Social whatever or a Chewpon, use it. Or you just handed over cash money for nothing. But you don't need me minding your Ps and Qs, right? Right.
So, what do you think Baltimore businesses, of the Groupon effect? Has it been good for businesses in Baltimore who've used it, or not?
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