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Comment by lambtron | Hacker News Reader

even though i have my qualms about andrew mason, it seems as if it were the bankers working on the IPO that are doing all they can to get it approved by the SEC so they can earn the fees and to cash out before the public is allowed to invest in groupon. and we are still figuring out if the daily deals model is profitable and sustainable.

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> and we are still figuring out if the daily deals model is profitable and sustainable.

Well, we're certainly finding out that the daily deals model is profitable for web developers and assorted startups. Hardly a day goes by without hearing about some new Groupon clone, and the number of web developers who are making money from clients who want to build Groupon clones has to be pretty high. It reminds me of a few years back when all our clients wanted to build their own social network and integrate it with their websites.

From what I've seen now, including being a mark of Groupon's, I think that Groupon amounts mainly to preying on small businesses that don't quite have the nous to realise that it's a bad deal to give up all your profits to Groupon (or whoever) in order to win an enlarged customer base filled with bargain hunters who cost you everytime you serve them. Hyperbole for sure but not that far off I think.

In the first web bubble, there was a lot of investment into companies giving stuff away at a loss. Eventually we all got too smart for that. Now there is a lot of investment into companies getting other companies to give stuff away at a loss. Just as unsustainable, but it'll drag out a bit longer before we all figure it out.

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