I just read about Groupon raising $950 Million. Great news for Groupon. I was thinking more on the underlying impact for marketers - and that bothered me.
Groupon helps sell more by offering significant discounts, in return for volume. Many marketers discount products and services, to acquire a customer. In essence - it is diminishing value, as the marketer faces a short term hit on profitability, and perhaps a loss in many cases. Agreed?
Now with $950 Million in the kitty, Groupon will aggressively do more of what it does - diminish value for more marketers! In the end customers win, but its a circle, it will catch up soon. Are we looking at a bubble? Or is there enough profit buffer amongst producers, that this will just scratch the surface?
Obviously a very contrarian view - am i alone?
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