I've never been able to understand the competitive advantage of Groupon's business model. While they can offer local businesses a large pool of prospective cust

I've never been able to understand the competitive advantage of Groupon's business model. While they can offer local businesses a large pool of prospective customers, they are constrained to being pseudo-local. I lived in Philadelphia and about 3 Groupon-like models popped up around my university and offered me more relevant deals than Groupon did. By being super-niche, they were more useful to me. To get more entrenched in any given locality, Groupon needs to hire more sales people and this will not scale profitably. I think the killer business model in this arena is the platform model - what Yipit are doing. Aggregate deal-providers and serve as the information hub about all deals. I'd love to hear a good defense of Groupon's business model. It would be a relief that staggering amounts of capital are being raised with a sensible strategy.