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Jeff - Love the Fountainhead too. In the case of Groupon, I think there are several reasons people like to bash it. First, the company has received sky high valuations while the previous investors have kept hundreds of millions of dollars for themselves even though the company continued to lose hundreds of millions. Co-founder Eric Lefkofsky took $319 million while the company lost $223 million in cash the first half of 2011 alone. $946 million has already been cashed out by insiders. Groupon is perceived as fleecing local business owners by keeping 50% of the discount for themselves leaving businesses with only a quarter of the normal retail price. They've had some "unconventional" accounting to make top line revenue appear a lot bigger. Finally, they spend so much money on marketing without having proving that their model is sustainable over a significant period of time. I wish the company luck and have used a few Groupons myself. Will be interesting to see how everything plays out in this space with the recent BuyWithMe news about massive layoffs.
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Oct 22, 2011