1) Newly funded companies have fresh pots of capital to invest in online marketing. The auction dynamic of most online marketing tools means a new entrant driv

1) Newly funded companies have fresh pots of capital to invest in online marketing. The auction dynamic of most online marketing tools means a new entrant drives prices up for everyone. 2) Other new entrants have local advantages (existing salesforce, merchant relationships) which are harder for Groupon to counter. 3) New entrants often heavily discount in their launch phase, further hurting Groupon competitively.