Post-IPO, Groupon Faces (Even) More Competitors

Groupon just succeeded in raising a mint of money -- $700 million -- with a limited IPO of 35 million shares last week. That values the company at around $12.8 billion, down from the heady heights of the $25+ billion range not so many months ago. But analysts are warning that the company may still be overpriced, given that there are essentially no barriers to entry for new competitors in the group discount arena.

Indeed, there may be as many as 600 competitors, according to a tally by MSNBC in August, although the high rate of turnover means many of these have already failed or been sucked up by larger competitors: a separate survey from found that 170 of 530 daily deal sites have already met their demise in 2011. The point is there are a lot of these sites running around, and new ones seem to pop up every day.

One of the bigger new launches is ShareItUp, from PeopleString Corporation, which unveiled a new coupon and deal platform that allows advertisers and marketers large and small to create and launch social coupons and deals on their Facebook business pages. In the ShareItUp iteration of the group discount model, social coupons go up in value the more they are shared -- thus rewarding Facebook fans, Twitter followers and email subscribers for sharing their offers.

ShareItUp also employs a cost-per-share pricing system for social commerce, wherein advertisers are only charged when their offers are socially engaged by a fan or their friends (or their friends’ friends, etc.). The social coupons feature security features to prevent online coupon fraud including the users name, watermarks and unique identification codes.

1 comment about "Post-IPO, Groupon Faces (Even) More Competitors".
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  1. Nicholas Theodore from Self-Employed, November 9, 2011 at 6:59 p.m.

    Prediction: Groupon within 6 months=$10 or less. Within the Google system, maybe Grpn was worth $6B. However, in my opinion, this stock is now not a buy. Another case of chasing the proverbial pot of gold.

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