Daily deal leader Groupon continues to grow its revenues at a jaw-dropping pace. According to its updated S-1 filing, the company sold $878 million in Groupons in the second quarter, ten times more than a year earlier:
However, costs have been exploding too. Groupon spent almost $1 billion in Q2:
Put it all together, and Groupon has been losing hundreds of millions of dollars:
Small compared to the billions and trillions of red ink the federal government confronts, but still a formidable problem. Particularly given all the other players in this space, including a certain search company whose $6 billion acquisition offer Groupon spurned last year. I would have taken the money and run. But perhaps I am not seeing the secret ingredient that will give Groupon a persistent competitive advantage in the face of vigorous competition.
7 thoughts on “Groupon’s Explosive Growth Continues … As Do Its Losses”
What is Groupon’s business model? – SPAM
How does that become successful? I think I will start a business that dumps raw sewage on people’s doorsteps. I can see the billions rolling in now.
Group On =POOPED On.
Only the IPO will save those Chicago boys from going down. Too bad the merchants that get suckered into the “deal” don’t have that option. It is a broken marketing plan. Only the consumers make out.
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