I don't see how Groupon is anything more than a huge bubble waiting to burst. They may be worth something, but nothing even close to the valuation that Groupon

I don't see how Groupon is anything more than a huge bubble waiting to burst. They may be worth something, but nothing even close to the valuation that Groupon/bankers are trying to create with accounting tricks. From a merchant perspective, I don't see how using Groupon helps long-term profitability. Almost everyone I know who use Groupon regularly only visit the participating merchants when using a Groupon and never again. Furthermore, they are reluctant to pay full price at any merchant if they know that that that merchant has previously had a Groupon promotion. So the merchant not only effectively spends marketing $$$ (since Groupon is supposed to be considered a marketing expense) for customers that will only use the loss-producing (likely) coupon, the merchant also devalues itself in people's (including those that did not previously use a Groupon) eyes. Additionally, the daily deal industry itself doesn't have strong reasons to remain tied to a company (unlike social networking where people tend to stay where their friends are) and there are very low barriers to entry. Granted, if you're the biggest player in the market, you have certain advantages like economies of scale, brand recognition, but I don't know if that is sufficient to thrive in this industry where people jump from site to site depending on which site has the best deals for that day. Add in pre-IPO accounting tricks and early cash-out (while the company is running hundreds of millions in the red)...well, you get the point.