“A 6-8-11 New York Times articles worth looking into. ‘ Is Groupon‘s Business Model Sustainable? By MICHAEL J. DE LA MERCED ‘
NYT … Despite the explosive revenue growth of the social site, Groupon’s business model appears to be currently faltering somewhat, based on the numbers in its I.P.O. filing.
Neven … In my humble opinion, this is a very unbiased and very good analytical insight into Groupon’s business model. ”
I don not want to say that I told you so, but … according to the Aug. 17th, 2011 …. http://www.businessinsder.com article by Henry Bodget , ” Don’t Mean To Be Alarmist, But Groupon Is Running Low On Cash “, there are some questions and concerns that need to be answered . In my humble opinion, it seems that Groupon’s business model does not have a “wide moat“. It’s business model is apparently reliant on increasing sales to increase CASH FLOW. That is fine if a new venture does not have many emerging competitors and has high barriers to entry for this type of business model. However, unfortunately, this is not the case for Groupon.