Just don't understand why a company with a flawed business plan, nothing unique or secret sauce and cloned by thousands worldwide justifies a $25 B valuation. Groupon is turning the retail sales market upside. If buyers demand 50% off everything driven by the Groupon business model, how will merchants stay in business, especially product sales merchants? If the number of merchants doing groupons fall off due to lower profits, becoming victims of the 50% off groupon mindset and the buyers stop buying because of limited discretionary spending, where do future revenues come from. If one analyzes the Groupon business model, it looks a lot like an over-hyped Ponzi Scheme.

Yea, the 50% discount thing is unsustainable. Perhaps groupon should realize that in terms of psychology, a 1% discount vs a 0% discount is HUGE… out of 100 people, nearly all would go to the 1% discount resteraunt instead of the 0% discount one simply because “there is a discount”. Funny how our minds work, no?

I don't think it's realistic to argue that Groupon is unsustainable because a 50% discount on everything is going to sink companies. The Groupons are only offering as much of a discount as the companies allow, and often the discount (say $40 for $100 worth of custom framing) isn't large enough for customers to get a $100 picture for $40, they end up getting a $60 discount off a $300 framing job, which isn't a discount that is out of whack with what the company would normally be offering in a cash-poor month. Plus, Groupons introduce customers to places they find they enjoy and that they then return to when a Groupon is not being offered.This app sounds like the same theory on a larger scale – keep bringing people in the door during slow times, eliminate times when a restaurant is paying overhead, a waitstaff, and kitchen crew to sit around with little to do.

so nice someone else was awake in Econ class too !!! so does this mean Val-Pak esque snail spam are worth billions too???