More

Facebook, Google, Living Social: Groupon Competitors That Could Take Over

The Huffington Post   Jason O. Gilbert   First Posted: 11/04/11 06:52 PM ET   Updated: 11/04/11 06:52 PM ET

Groupon is off to a hot start on the stock market, seeing its company value balloon to over $16 billion on its first day of trading on the NASDAQ exchange. But just ask Pets.com: Initial excitement over a stock offering does not guarantee a long and happy life for an Internet company.

With that in mind -- and with the oft-repeated caveat that Groupon is in a market with hundreds of competitors and extremely low barriers to entry -- we're taking a look at the companies that could take Groupon's valuation from over $16.5 billion down to zero point zero.

LivingSocial
1  of  7
PLAY
FULLSCREEN
ZOOM
SHARE THIS SLIDE 
With hundreds of millions of dollars in funding from Amazon, LivingSocial is Groupon's most logical competitor from a strategy standpoint. Like Groupon, it offers a daily deal at a business establishment in the customer's neighborhood, offering a meal, a movie ticket or a service at a heavily discounted price. The customer then buys the deal and presents his or her voucher at the establishment to get the discount.


WHY IT COULD BANKRUPT GROUPON: Amazon. Right now, LivingSocial gets about half as many unique viewers to its website as Groupon, according to Compete's site analytics; if Amazon were to leverage its Rolodex and its bank account and meaningfully integrate LivingSocial into its own website, it could leapfrog Groupon and render it a mere also-ran in the daily deals landscape.

For now, there is no indication that this full integration will happen, aside from Amazon's continued investment in LivingSocial. In June 2011, Amazon started a pilot program for a daily deals site called AmazonLocal, which aggregated the best local discounts from around the web onto one website. No word on an exclusive Amazon/LivingSocial integration yet; it's all rumors for now.

CORRECTION: In an email, a spokesperson for AmazonLocal describes AmazonLocal thus:

AmazonLocal is not an aggregator. LivingSocial just provides (a.k.a. "sources") the deals to AmazonLocal and AmazonLocal makes them available to their own customers.

LivingSocial provides the deals that AmazonLocal uses; however, the deals that can be bought by customers from LivingSocial and the deals that are bought by customers from AmazonLocal are not the same. They are not the same merchants, nor are they sold on the same day.
.
MORE SLIDESHOWS NEXT >   |   < PREV
RATE IT!   |  
VOTE
CURRENT TOP 5 PICK YOUR OWN TOP 5
USERS WHO VOTED
NEW! CREATE YOUR OWN SLIDESHOW

FOLLOW HUFFPOST TECH

Groupon is off to a hot start on the stock market, seeing its company value balloon to over $16 billion on its first day of trading on the NASDAQ exchange. But just ask Pets.com: Initial excitement ov...
Groupon is off to a hot start on the stock market, seeing its company value balloon to over $16 billion on its first day of trading on the NASDAQ exchange. But just ask Pets.com: Initial excitement ov...
Related News On Huffington Post:
 

What's Your Reaction?
Inspiring
 Funny
 Obsolete
 Scary
 Must-Have
 Amazing
 Innovative
 Nerdy

More in Technology...


 
 
  • Comments
  • 6
  • Pending Comments
  • 0
  • View FAQ
Comments are closed for this entry
View All
Favorites
Recency  | 
Popularity
photo
Beercandyman
Never deny to someone else, the rights you enjoy.
191 Fans
03:36 AM on 11/07/2011
They got a lot of money so they should reinvent themselves asap. They want you to give 50% off your regular price to the customer and they get 50% of what is left over. They want me to give 75% off on a manufactured product. You can do that if you are giving messages. You can't run your manufacturing business like that unless you are making gold out of pixie dust...
Permalink  |
photo
HUFFPOST SUPER USER
brandon20678
Corporations have 99 problems and I'm 1
68 Fans
 
10:40 AM on 11/06/2011
with Groupon executives it's all about the Money I signed up for a groupon account last year and never even used it since then.
Permalink  |
photo
HUFFPOST SUPER USER
Tunghoy
My other car is a TARDIS
782 Fans
01:35 AM on 11/06/2011
No way would I buy this stock. Groupon already peaked. How many deals on spas, nails and facials do you need?
Permalink  |
This user has chosen to opt out of the Badges program
photo
Peter Coopersmith
4 Fans
06:11 PM on 11/05/2011
Groupon is like the Huluhoop...it is a fad. Besides the obvious probelms with competitors, the real question is not can they hold on to customers. The real question is, can they hold on to businesses? The model they have developed is great for Groupon, but not so great for small business...and small busisness is starting to figure that out. There is currently a 50% rate of drop out; if that continues there will not be any businesses left. Groupon promtes itself as being a great way to get new customers...not make more money. At best this works only once or twice for a business... Time is not on the side of Groupon...as they move forward, the paradigm they use will have to change. They are at the top; there is no where to go but down.
Permalink  |
HUFFPOST SUPER USER
SeattleNick
Progressive though listens to all opinions
463 Fans
 
06:04 PM on 11/05/2011
I think the downfall of companies like this is the advertisers are not making the money that they had hoped. When you get 65% off as the new client it is a great deal for you but you will never go back to that company at the regular price. The advertiser is actually not making anything Groupon is the only one making money. The funds look great but don't even cover the cost of the employee.
Permalink  |
photo
HUFFPOST COMMUNITY MODERATOR
way2sunny
707 Fans
10:04 PM on 11/05/2011
It's a bad idea to devalue your business. I've heard lots of people say (after using a Groupon) that they never would have bought the service at the regular price, that it's not worth it once it can be had for half that. People just wait for the next one. The perceived value of the original item or service becomes what the discounted price was, and the usual price seems grossly inflated.
Permalink  |