Yelp Cuts Back On Daily Deals, Great Timing for Groupon

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It's an interesting time for the daily deals space. As previously reported, Facebook, which may assumed would be a major player, has decided to fold its deals product, though the company is keeping around check-in deals.

Yelp, another popular service is also scaling back in the deals department. It has been reported that Yelp cut half of its Deals staff this week, after launching Yelp Deals last year. It's not pulling the plug on Deals entirely, but the company has cut a reported 15 positions related to Deals.

Google is still expected to be a major player in the space, especially now that it has Google+ to help it (as if it needed that, given all of its other products), but Google Offers has yet to launch in too many markets.

Experian Hitwise reported this week that Groupon's traffic this summer has been down by 50%, while its main rival LivingSocial's traffic has gone up by 27%. Perhaps a little less focus on deals from competitors is exactly what Groupon needs right now in the road up to its IPO.

Kara Swisher has an interesting piece talking about employee morale being low at Groupon, thanks to negative press the company has been getting. She reports:

“It’s made it very difficult for those working at Groupon,” said one source. “But, worse, is how much our reputation is getting burned in the eyes of young engineers we need to recruit.”

What management at the company does not seem to be as worried about, said sources, is investor disinterest when it comes time to hawk and price the public offering.

Morale from CEO Andrew Mason doesn't seem that it has been so bad, however. In a leaked memo (also originally obtained by Swisher), Mason told employees, "…the degree to which we’re getting the shit kicked out of us in the press had finally crossed the threshold from “annoying” to “hilarious.” Second, I was struck by the irony — I had just finished a board meeting last Wednesday saying this to myself: I’ve never been more confident and excited about the future of our business."

Groupon has been an inspirational business to say the least. The company has inspired countless knock-offs, copycats, and other somewhat original ideas based on the daily deals concept - from niche versions to aggregation sites, and of course entries into the market from Internet giants.

It's going to be very interesting to see how the market treats Groupon as public company, but also how the competition holds up.

Chris Crum
Chris 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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