That's true, but then yet another knock on Groupon is that it's not clear they actually have any sort of exclusive access to their userbase. It doesn't really

That's true, but then yet another knock on Groupon is that it's not clear they actually have any sort of exclusive access to their userbase. It doesn't really cost a Groupon user anything to also sign up for LivingSocial or AmazonLocal, and a user looking for good deals actually has the incentive to sign up for as many of these services as are available (a good deal can come from anywhere). There's also the common observation from Groupon advertisers that Groupon users aren't necessarily particularly desirable customers. They're often deal hunters who have no interest in becoming regular customers after they've used their coupon (not that LivingSocial or AmazonLocal users would be any better in this regard). Edit: also worth pointing out, this is why I think Square's latest offering has the potential to knock it out of the park: user and merchant stickiness, going after loyalty rather than dealhunting, etc.