[jonathankoren]

It's not just the two-sided acquisition costs, it's also that on the vendor side of the equation, daily deal sites have absolutely horrible retention.[0] No small to medium sized business would repeat, because the massive discounted price of the Groupon deal was never recouped by repeat customers. Instead they just attracted deal seekers.

[0] http://www.businessinsider.com/groupon-survey-results-2011-7

[sharemywin]

it's a great product for a bowling ally. Fixed space/costs So, each extra person you bring in has value. Horrible for food service where marginal costs are ~65%, so you lose 40% every time someone comes in.