[ookblah]

1. This is good, as long as these local business are being educated on the benefits/risks vs just being told it's good overall.

2. Groupon deals are used as a marketing tool to (hopefully) attract long-term customers/develop buzz. Merchants lose on every deal so I don't know what you mean by "cash up front".

3. Look at #2

Imitation may be the best form of flattery, but it may also just indicate that everyone is jumping into a hyped up market. Look at the aftermath of all the social networks. Except that Groupon doesn't benefit from user loyalty effects.

IMO, it's unsustainable growth in it's current form. I think they can develop a profitable business (as they did before), but sustaining that hyper growth curve....not so sure.

I don't understand what Groupon hoped to gain with it's "first-mover" advantage. Everyone I know (including me) who buys groupons does it just because they give the best deal for a specific business, not because I'm somehow loyal to Groupon. I will just as readily use Living Social or Buywithme or whatever other coupon site is out there. Until they fix this, the market will just be saturated with more and more players. Race to the bottom.

[mitultiwari]

When a deal appears for a business on Groupon, people buy those deals that day and visit that business later on. That's what I meant by "cash up front".

Yes, I agree with you that barrier to entry is very low. However, Groupon has so many businesses lined up (since they have maximum reach) that Groupon can choose the best deal to offer to customers. That's the advantage Groupon has compared to others.