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Groupon Treading Seas of Controversy

Written on
Jun 24, 2011 
Author
Gavin Dunaway  |
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Groupon Treading Seas of Controversy

ADOTAS – Even though Groupon had been threatening an IPO for months — one at a near-ridiculous $20 billion-plus valuation — it’s kind of funny that the [excrement] didn’t hit the fan until it filed an S-1 with the Securities Exchange Commission.

Since then it’s been hard to keep up with all the controversy emerging around the daily discount leader — rumors about execs pocketing venture capital, shady businesses practices, buckets of money lost and an audience losing interest in its deals. Fortunately, our friends at OnlineMBA.com wrapped all the scandalous material into the pretty infographic below.

The tech media’s “shocked, SHOCKED!” coverage, sensationalizing every little grain of dirt for some cheap pageviews, is annoying — everyone in the business plays loose at times, the question is how loose is too loose?

Many of us have wondered if Groupon is a sustainable business for a while, but it seems a lot of people have recently had the revelation, “Most of Groupon’s deals are completely irrelevant to me!” That’s bad news as companies with more targeted offerings enter the space.

However, Groupon has launched its real-time Groupon Now service with location-based mobile social network Loopt, which provides alerts to users for nearby deals via push notifications, and was in talks to do something similar with Foursquare. In addition, the company acquired Pelago, creator of check-in network Whrrl, fueling speculation that Groupon would launch its own location-based mobile social network, but it might have just desired Pelago’s advanced social recommendation technology.

So there’s still potential, but that doesn’t mean squat if investors pass on Groupon because of a shady rise to dominance.

And if you’re up for more visualizations, our buds at AdGooroo shared this interesting chart illustrating that Groupon’s AdWords spend has peaked while rival LivingSocial’s is still climbing.





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