• http://www.makesocialsell.com Jeff Molander

    Hi, Barry. This is actually dangerous for Google. Here’s why:

    Groupon is not a company offering **sustainable value** so much as they are a run-of-the-mill venture capital investment toy.

    You see, Groupon is today’s Restaurant.com — minus the entrepreneurial sensibility. Restaurant.com burned through the restaurant market with its similar “buy a $25 gift certificate for $3″ model. But they stopped when small businesses owners it served figured out the simple math. They looked at the profitability of customers. There wasn’t enough to sustain participation with Restaurant.com’s model.

    Increasingly, qualified research is being published on Groupon’s effectiveness http://bit.ly/f3Hn2N and the result is not surprising: Small business owners don’t define “effective” as having anything to do with “profitable.”

    Groupon is advertising. But with a twist. It trains an “increasingly already trained” retail shopper to **expect** the discount, tip less and not return without receiving ANOTHER a profit-dinging discount.

    Like in affiliate marketing, it’s disingenuous to say, “Groupon gets paid on performance — only when it sends customers to the door” when the facts are so stark. It sends customers who are remarkably un-profitable under this discount model.

    Ironically, Chicago-based Restaurant.com got out of the short-term business just in time to re-structure its offer. The rest is history.

    Bottom line: Groupon “trains” boatloads of customers to expect future discounts in a growing retail environment that breeds the same. Retail suicide is in full swing. And Groupon is not a real company offering **sustainable value** so much as they are a run-of-the-mill venture capital investment toy.