Can Groupon turn things around?

Groupon's best days may be behind it.

With all the attention on Twitter's initial public offering today, it's worth a look back at the hot tech IPO of November 2011 as it reports earnings:  Groupon, the daily-deal site. 

Groupon stumbled out of the gate, with low profits, lots of competitors, and high costs.  It's been in turnaround mode ever since.

The turnaround picked up steam this year. In January, Groupon dumped its CEO. Since then, there's been a website re-design and a re-launch of the company's mobile apps. It's been expanding overseas.

But the company's best days are behind it, says Hilary Kramer of A & G Capital. "The game is over now for Groupon," she says. "The competitors are going to do its job better than Groupon ever did."

She means companies like Facebook, Amazon, and Google. They can offer you a deal on anything you like. And, having gotten pretty intimate with you, they know what you like.

But Internet analyst Greg Sterling thinks that, whatever happens with Groupon, it's made an important contribution. Groupon pioneered the idea of making e-commerce local.

"What they did was get to you to buy offline services," he says -- meaning, say, manicures -- "then pay for them upfront in an e-commerce transaction, and fulfill them in the real world. And that will survive them, even if they don't stick around."

So, next time you buy a disconuted parking spot with an app like SpotHero, thank Groupon.

About the author

Dan is a sustainability reporter for Marketplace.

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