On the plus side, Groupon has high name recognition, an international rolodex of contacts with small businesses clients (whether or not deals were made), an international rolodex of customer names with contact info and preferences, huge number of international offices and sales staff, a large profit margin from the business clients, interest-free loans from customers in exchange for a pdf coupon, the clients handles delivery/fulfillment to the customer months to a year later (assuming the customer remembers the coupon exists). And more. They've got a TON of room to grow if they can plug any revenue leaks. Sure, a lot of places can handle local deals. What if Groupon starts synchronizing deals? Every hair salon 10km apart in every city and country gives a touchup for $20? All dance schools, first salsa lesson free? It could drive trends. A mobile app that tracks all customer clicks? Tied to a recommendation service that tells the customer to wait for an upcoming deal within a week, or tells the Groupon office the kind of deals they should pursue that month? A service to tell retail entrepreneurs the sales demographics per area and business? Sell retailer data to financial and IT services to help them manage and modernize their businesses? I see a lot of possibilities for a big network.