Has Groupon started to decline?

According to US daily deals aggregation service Yopit Groupon’s revenue decreased 30% in February 2010.

Is such decline a sign of the fade of the daily deals market in general or Groupon’s particular problem? The company has changed it’s business model significantly from single “the best deal in the city”, that worked extremely well and helped Groupon to become multi-million business in very short term. Now there are such stuff as geo-targeted deals, merchant’s stores.
Maybe this is not what Groupon costomers are looking for and this new business model conflicts with Groupon’s brand promise?

Interesting that according Yopit, LivingSocial – second business group buying web site revenue has been growing in “59% in March and is now generating as much revenue as Groupon in major markets”.
GroupOn declines while LivingSocial grows at major markets, March 2011

3 Replies to “Has Groupon started to decline?”

  1. Daily deals and group buying has simply grown faster then any industry before it. Keeping that pace just was unsustainable so I guess a slow down was just waiting to happen some time.

  2. I think the industry is simply waiting to innovate to the next step. With all the new sites popping up its only a matter of time before we see improvements and new avenues of growth.

    At http://www.grabbed.com.au we have introduced a system similar to auction sites like email. Rather than giving people a once off $100 credit to recommend a business they know, we will actually make them our employee for 24hours for the deal they sign up. This way they will see growth and earn money, potentially a lot more than $100 depending on how many units are sold.

  3. Probably Groupon’s innovations are the reasons of their problem, sometimes simpler things are better. Will see what happens in next months.

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