Is Groupon Losing its Edge?

By: Chris Crum - June 29, 2011

It’s well known that the daily deals space is getting more and more competitive. It seems that nearly every other day a new service related to this industry is being announced. LivingSocial, who has been doing a whole lot of TV advertising these days has been consistently named as Groupon’s closest competitor.

A report today from Bloomberg BusinessWeek, citing data from Yipit, indicates that Groupon’s share is slipping as LivingSocial’s is gaining. It says that Groupon’s share has slipped to 48% (in May) from 52% in April, while LivingSocial’s share has risen from 20% in April to 24% in May.

Even Yipit itself said in a blog post earlier this month, “The reports of Groupon’s death are greatly exaggerated.”

That may be. Groupon is far from dead, but there’s no question the competition is only going to get fiercer. Google Offers (launched after Groupon turned down a buyout offer from Google) hasn’t even launched beyond its first city yet. Now, Google has a brand new social network to help it potentially get deals out in new ways (to compliment its other existing products). When Google Offers goes live on a mass scale in markets everywhere, it will be very interesting to see where Groupon, LivingSocial, and all of the other competitors stand.

If there’s one thing (besides search) that Google has been able to do right, it’s advertising. In fact, a new report from IgntionOne just came out showing Google as the “standout performer” in online advertising, while Facebook ads get more popular. Guess who just announced its own Facebook competitor, not to mention the mass roll-out of interest-based advertising to all advertisers.

In other Groupon news, has reported that the entire user database of Groupon’s Indian subidiary was accidentally published to the web and indexed by Google. This included the email addresses and passwordds of 300,000 users, according to the report. Groupon reportedly said in a statement:

After being alerted to this issue by an information security expert, we corrected the problem immediately. We have begun notifying our subscribers and advising them to change their Sosasta passwords as soon as possible. We will keep our Indian subscribers fully informed as we learn more.

Sosasta runs on its own platform and servers, and is not connected to Groupon sites in other countries.

Chris Crum

About the Author

Chris CrumChris Crum has been a part of the WebProNews team and the iEntry Network of B2B Publications since 2003. Follow Chris on Twitter, on StumbleUpon, on Pinterest and/or on Google: +Chris Crum.

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  • Yariana

    I’ve never used it.

  • Sophie

    The first time I seen groupon was when my boss showed it to me. And since then I’ve seen a lot more people using it. I prefer Yelp myself. I do like the idea of groupon though, it does provide good discounts.

  • Sam

    Daily deal sites are not good for businesses- unless they are clearing out stock. Quite a few businesses find that it doesn’t work. Obviously there will still be some of these sites around in the future- but not all will survive.

  • Tom Aikins

    Has Groupon actually made a profit yet? I’ve read that it lost a substantial amount of money in the last quarter. If they’re not making money and the businesses themselves who offer the Groupons aren’t making money then how sustainable is this model? They should have taken the $6 billion from Google when they could have.