When it comes to the world of "deals", Groupon (GRPN ) has become a household name. Over the past eight years, the e-company has given merchants a platform to sell over six million unique deals to customers--which have come in the form of discounted things to do, eat, see, buy, and experience. In addition to profiting through marketing fees, the commerce website makes a commission of around 50% on each deal successfully sold. For merchants, satisfactory ratings with Groupon have remained around 80%, which is about 15 points higher than average e-marketplace ratings. This is because Groupon only makes money when merchants make money, and customers benefit by saving money on a multitude of activities, events, products, and services. When no one party feels that they're being taken advantage of, success seems to be easy.
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Since going public in November of 2011, however, Groupon has been viewed as a complex stock. According to Fortune, the company entered the market with a valuation of $13 billion, and soon after stock prices dropped to half of its IPO valuation, which remains the case today. Each year has reported a net income loss from the previous year, letting many to recognize that the expectations for this company may have just been set too high. Regardless, annual company revenue grows and customers are still spending upwards of $7.6 billion a year on Groupon deals. Expansively, the company has penetrated 500 markets including many outside of the United States, where it all began. While the company has had to pull business out of 11 countries, their presence remains strong in 47 today. In 2011, Poland was the largest market in terms of online penetration, reaching 12.5% of internet users above age 15 (followed by France, who saw a reach of 8.6%). Poland remains a large market today--offering the same diversity of services available to American users.
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The lifespan of Groupon is expected to be long, due largely to their popularity in this industry (with only one major competitor: Livingsocial Inc.). About 88% of Groupon's revenue comes from "daily deals." Diversifying, the company launched "Groupon Goods," modelled after goods-selling platforms like Amazon (AMZN ), which accounts for 20% of income. A new addition that seems to be picking up steam is Groupon Getaways; which offers many airfare-inclusive and resort-inclusive travel deals that market themselves as a surprise-free way to book vacations. While some may be weary of purchasing this stock, Fox Business recommended Groupon as one of the "hot stocks" to buy in August, quoting "gross billings rose 8% in North America for its latest quarter. That may not seem so great, but it tweaks the narrative of a flash sale provider that once seemed to be fading from relevance."
