3foldComm

One of our 3folders, Alicia, is besotted with Groupon, and she’s determined to convert us all.

While most of the social media press coverage goes to the ever-waging geolocation wars between Foursquare, Gowalla, and the like, the battlefield of social daily bargaining has come into play. And at the moment, Groupon is the one to beat, although competitor LivingSocial just received $25 million to take on Groupon.

Here’s the overview: Groupon is a website which promotes one big deal per city per day, mostly via a daily email newsletter. There are currently editions for 26 US. cities (with a goal of rolling out in an additional 30 in the next year), and the site advertises a deal with a awesomely heavy discount each day from a selected local establishment like a restaurant, nail salon, or gym. (Businesses looking to get listed on Groupon even have their own information section). In order to get the discount, enough members have to opt into the deal first. Groupon takes a cut of earnings if the deal hits the “tipping point” and goes live; otherwise, the featured merchant does not have to pay.

With 3,000,000+ subscribers, the potential for businesses is exciting. According to Groupon’s website, the demographics of users and businesses are hard to ignore:

• 50% are socially active, going out twice a week or more
• Almost all are frequent users of Facebook, Twitter, blogs, and other social media tools
• 66% read Groupon write-ups every day
• 66% use Groupon primarily as a guide to explore their city
• 92% of businesses said Groupon brought in quality customers
• 89% businesses said those customers were likely repeat customers

For those of us who live for the next big thing, the daily deals market is not overly sexy. However, unlike last year’s media darling, Twitter, which has yet to find a true revenue stream, Groupon is already turning a profit after little more than a year in business. Beyond that, it has proven to be popular, for the public and businesses alike. It makes sense that more companies want a piece of Groupon’s deal-making pie.