What’s the Deal? An Update on your Favorite Daily Deal Sites

We all love a good deal, and nothing shows that more than the explosive success of daily deal sites. Lets see who they are, where they stand, and where they are going, if anywhere.

Groupon, the first major deal-of-the-day program, launched in November 2008. It took a mere 16 months for the company to reach $1 billion; the only company to do this faster was YouTube (12 months) (Forbes). The company’s avg. monthly revenue estimate, provided by tech-crunch, from 11/2010 to 2/2011 was 76.7 million (Tech Crunch). Currently it is valued in the neighborhood of 7.8 Billion dollars and reaches 500 markets across 44 countries (source). It is no leap to say that Groupon has been a huge success, but as competitors and copycats pop-up the question becomes, how will Groupon sustain its dominance?

Future:

The Company is working on launching something that is considers to be a game-changer in the deal-of-the-day industry – the Groupon Now app. The app, built for smartphones, is meant to be deliberately simple. After a clicks the app, they are presented with two buttons “I’m Hungry” or “I’m Bored”. Using the phones GPS the app will return a relevant deal, available only for a few hours, within a given distance of the user.  The app was slated to launch in April, but is yet to surface.

Living Social is the second largest daily deal site, available in 250 markets and 12 countries. Living Social differentiates itself by removing the minimum number of deals purchased in order to activate a deal, offering travel deals called “adventures” and giving users the opportunity to get their deal for free by convincing 3 friends to purchase that deal.  The company’s financials are a bit more closely held than Groupon, but it seems as though numbers are indicating its value to fall just short of 3 Billion dollars with total monthly revenue of approximately 50 million (Tech Crunch).

Future:

Where does the future lie for Living Social? If Mashable is right, it will surpass Groupon’s market share by 2012. Taking in to account deal size and the number sold, it appears that as of early 2011 Living Social sells 40% of deals (that’s $4 out of every $10).

It is starting to look like Google’s favorite hobby is going in to successful markets in an attempt to chip away at market share (see Google Buzz OR Gmail OR Google Docs). It has recently made live Google Offers, an offering that promises “50% off or more at places you love”. It is currently in Beta and is offering deals in New York City, Oakland/East Bay, Portland Oregon, and San Francisco.  You can sign up HERE.

I know, you’re probably asking yourself on what planet does AT&T belong in the same category as Living Social and Groupon. The truth is, AT&T has recently made live 2 programs that it hopes will chip away some market share from these two deals behemoths.

AT&T Shop Alerts

With this program, AT&T is putting up virtual zones around participating retailers. Once a participating user enters the zone, they will automatically receive a text message with a deal to a location within that zone. AT&T ShopAlerts is in beta and is only available in Chicago, Los Angeles, New York City, and San Francisco. You can sign up HERE.

Yellow Pages Deals

Very similar to Groupon and Living Social, Yellow Pages offers users local deals of the day from a trusted source, the Yellow Pages. Right now the program is in beta and is only available in Atlanta, Dallas/Fort Worth, and Los Angeles. If you sign up for the program now, you receive $10 towards the first deal of the day. You can sign up HERE.

Will Groupon Now be able to save Groupon or will Living Social overtake them in 2012? Do you think that newcomers Google or AT&T will be able to gain any traction?

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