[dreww]

if groupon is losing money on every customer, adding more customers actually exacerbates the cash flow problem, and every time those customers buy a deal, groupon goes farther in the hole. they use the cash to pay their oldest debts but eventually there will be a reckoning.

it's unfathomable to me that it would be an attractive investment.

[pbreit]

Your whole comment is lacking but this part is plainly false: "every time those customers buy a deal, groupon goes farther in the hole". Groupon's share of the every coupon purchase, which is around 40%, drops right to the bottom line.

[webwright]

For how many years did Amazon lose money on every customer? Land grabs WORK. I'm not convinced that it will here, or that Groupon is a good investment at its current valuation... But the idea that a retail voucher business can't be self-sustaining seems kinda silly. Groupon has 42% gross margins in 2011 q1 (UP 6% from the previous quarter).

[chromatic]

For how many years did Amazon lose money on every customer?

Fewer than most people think. Consider the financial model of a (successful) grocery store ostensibly losing a penny on each transaction. If you're clever, you can make plenty of money by arranging your contract terms carefully.

[webwright]

6 years is the answer to my rhetorical question, if you're curious. Groupon is less than halfway to that point, and has much higher gross margins than Amazon did at the time (and about 2x what Amazon has right now).