Deal-a-day website Groupon achieved the seemingly impossible: It launched in the midst of economic chaos (November 2008), spread to 300 markets in 35 countries (in about two years), rejected a $6 billion buyout from Google (earlier this month), and just announced a plan to raise almost a billion dollars in private funds. The Chicago-based company e-mails daily discounts for local goods or services to each of its 40 million subscribers.
For consumers, the “groupons” can offer substantial discounts: $25 for a $50 coupon at Nordstrom Rack, 50-plus percent off restaurants, museum admission, and the list goes on. Vendors get exposure to new customers. Most, if not all, of the deals are for nonessentials – spas, hotels, and entertainment. Groupon’s $500 million annual profit suggests that at half off, even the stingiest savers in stingy times can be convinced to spend. The company’s formula has inspired many competitors – LivingSocial and BuyWithMe among them – who hope to profit as well.