“Groupon, a local e-commerce marketplace that connects merchants and consumers by offering goods and services at a discount, today announced that it has filed a registration statement on Form S-1 with the Securities and Exchange
Commission for a proposed initial public offering of its Class A common stock.”
1
With these words at the top of its press release, Groupon announced to the financial markets on
June 2, 2011 that it was planning an initial public offering (IPO). Its filings with the U.S.
Securities and Exchange Commission (SEC) indicated that Groupon was looking to sell about a
5% stake in the company to public shareholders for $750 million to $1 billion. This price implied a $20 billion for the company as a whole.
2
The investment community had watched a parade of internet companies go public in the first half of 2011, and Groupon – along with other high-growth, web-based companies like
Zynga and Facebook – were widely expected to be the next to come to market. Some analysts, like eMarketer’s Jeffrey Grau, were excited by Groupon’s market position in an area with such explosively high growth:
“Although there are risks involved in daily deals and challenges for these companies, local commerce is a huge untapped market... It's very competitive and not all companies will make it, but there's a lot of money to be made.”
3
However, given that the company showed little hope for profitability in the near term, some analysts, including Sucharita Mulpuru at Forrester, were more skeptical that Groupon was an attractive investment:
“There is no rational math that could possibly get anyone to the valuation
Groupon thinks it deserves. [...] This IPO game isn't about finding value, it's about finding a greater fool who actually believes the valuation is true. Trust me, you will be the fool.”
4
Given this broad range of opinions within the financial community, Groupon’s ability to communicate its value as an investment will play a critical role in ensuring that the company obtains the amount of investment and overall valuation it is seeking.

COMPANY, INDUSTRY, AND REGULATORY BACKGROUND
Andrew Mason and Groupon’s Founding
Three months into his first year at the University of Chicago’s Harris School of Public Policy,
Andrew Mason dropped out to chase an idea with Eric Lefkofsky, an investor and entrepreneur
(and Mason’s former employer). Starting out with a $1 million investment, Lefkofsky wanted
Mason to put his unflagging work ethic and talent for web design to use on an entrepreneurial internet venture they called The Point . This website sought to unite individuals to work together toward a variety of social causes. While the concept was intriguing, these socially conscious efforts were not attracting enough subscribers. With The Point in danger of being shut down,
Lefkofsky started putting pressure on Mason to find a way to monetize the site.
5
Mason had noticed that site’s most popular campaigns had involved group buying, and he decided to create a sub-business on the site dedicated to this concept. This was the beginning of
Groupon, which launched its first offer – a two-for-one pizza deal – on October 22, 2008.
Twenty-four Chicago residents bought the deal, and Groupon was off and running. After six months of operating solely in Chicago, it expanded to Boston, New York, and Washington, D.C.
6
By the end of 2009, after only 14 months, Groupon had 1.8 million subscribers.
7
In 2010, the company was expanding into several new cities each month in addition to beginning its international expansion. It received and rejected multi-billion dollar offers from both Yahoo! and Google in late 2010
8
and closed the year with 50.5 million subscribers.
9
Groupon’s growth has continued at a torrid pace into 2011; the company has more than doubled its subscriber count in the first half of 2011, reporting 115.7 million subscribers as of June
30,2011. In the two and a half years from January 1, 2009 to June 30, 2011, over 23 million different customers have purchased a Groupon and over half have purchased more than one. The company also reports that it now has 9,600 employees and is offering deals in 45 countries.
10
The Groupon Culture
“We want the time people spend with Groupon to be memorable. Life is too short to be a boring company. […] we seek to create experiences for our customers that make today different enough from yesterday to justify getting out of bed.”
11
This statement from Mason’s letter to potential shareholders in Groupon’s Form S-1 indicates that he has no desire to allow Groupon to become a normal company (See Appendix A for the full letter). This vision, which is an outgrowth of Mason’s own personality and priorities, is to create a company that is intensely focused on its customers and merchants and is proud to be different.
12
Groupon’s daily deal descriptions are one of the clearest indications of its offbeat, quirky culture. The following deal description, from a deal offered in September 2011 for a Chicago pizza restaurant, provides a good example of the sorts of inside jokes and winking humor
Groupon uses in communications with its customers:
2

“Like planet earth, pizza contains morsels buried in its outer crust that can be pieced together to form a crude brontosaurus. Partake in culinary archeology with today's Groupon to Pizza D.O.C.”
Moreover, Groupon customer service employees are strictly instructed never to give in on these jokes. Responding to a deal description claiming that hummingbirds came from cocoons, a customer pointed out that they are actually hatched from eggs. In response, Groupon customer service politely disagreed and provided a photoshopped picture of a hummingbird emerging from a cocoon.
13
This example illustrates how Groupon’s quirkiness and pride in being different led it to adopt a unique strategy for communicating with its customers.
Groupon’s Business Model
Groupon’s core business is the operation of an online marketplace for group purchasing of coupons offered by merchants. These coupons are deeply discounted from the regular price of the actual product or service, often offering a 50% discount or more. A coupon becomes effective and redeemable only when the number of subscribers committed to purchase it has exceeded the minimum number required by the merchant. This process enables consumers to exert group buying power without actually forming a group and ensures that merchants reach enough consumers through this promotional effort. Groupon customers have a limited time to purchase and redeem the coupons, and merchants and Groupon keep revenue from unredeemed coupons.
Groupon deals are generally offered by local merchants targeting local consumers.
Groupon touts its business model as “creating a new way for local merchants to attract customers and sell goods and services” and providing “consumers with savings and help them discover what to do, eat, see and buy in the places where they live and work.”
14
Revenue from the sales of coupons is shared between Groupon and merchants.
Merchants generally collect 50 to 70 percent of the revenue from the sales of coupons while
Groupon retains the rest.
15
Groupon’s financial statements show that its share of the coupon sales has trended around 40% (See chart in Appendix B).
Groupon’s business model is ingenious in that it offers an effective tool to local businesses to reach local consumers. The e-commerce revolution has enabled small, local businesses to reach a global audience. However, their needs to connect with local shoppers have largely been underserved. Groupon helped bridge these gaps by enabling small businesses to target consumers locally and to track their response to the marketing efforts, creating an entirely new market for e-commerce.
Proliferation of Competitors
Groupon’s business model, while innovative, is not difficult to imitate, and its success and large margins have attracted a number of entrepreneurs and established firms to enter the space. Yipit,
3

which aggregates daily deals offered by various firms, lists 689 daily deals services similar to
Groupon as of September 30, 2011.
16
E. B. Boyd, an industry observer, notes that “few industries have seen more imitators in the last 12 months than the daily deals space.”
17
The most notable competitor to Groupon is LivingSocial, which was launched in 2008 as a social discovery and cataloguing network. LivingSocial began offering daily deals in 2009 and quickly became the second largest player in the industry, after Groupon.
18
LivingSocial has raised more than $600 million from private and public investors, including Grotech Ventures and
Amazon.com, as of April 2011.
19
A round of funding in April 2011 valued the firm at approximately $3.5 billion, and the firm is said to be considering another round of funding that could value it at as much as $6 billion.
20
Just like Groupon, many of the firms competing in the market are venture-backed startups, but some industry giants have begun to tackle the daily deals business as well. Google,
Amazon, and Facebook have all launched their own versions of daily deals services called
Google Offers, Amazon Local, and Facebook Deals, respectively. Microsoft has also entered the market in 2011 with Bing deals, where shoppers can purchase coupons as well as discounted products. Facebook, however, discontinued its Deals product in September 2011 only four months after its launch.
21
The daily deals market is becoming overcrowded and competitive pressure is increasing.
Some analysts believe that the group purchasing of coupons is a commodity business, and
Groupon will not be able to maintain its margin in a hyper-competitive market.
22
International Expansion and Legal Challenges
While Groupon has faced stiff competition in the United States, it has also encountered a new set of challenges involving its intellectual properties as it expanded overseas. In some of the markets it has entered, Groupon found that its trademark rights and domain name had already been registered by others. In order to gain the right to use these trademarks and domain names,
Groupon had to pay as much as hundreds of thousands of dollars.
23
In Australia, the dispute over the Groupon domain name developed into a bitter legal battle. Scoopon, an Australian daily deals company launched in April 2010, purchased the groupon.com.au domain name and filed to register the Groupon trademark in Australia, allegedly seven days before Groupon did.
24
Andrew Mason, in a blog posted on Groupon, states:
The way we see things, this is a classic case of domain squatting – an unfortunate reality of the Internet business. As Groupon became internationally known, opportunistic domain squatters around the world started to buy local Groupon domain names, thinking that we’d eventually be forced to buy them at an insane price.
25
Mason goes on to claim that Groupon offered Scoopon $286,000 for the groupon.com.au domain name and the trademark, which they initially accepted but later backed out of the
4

agreement.
26
Groupon then filed a lawsuit against Scoopon and launched a new site called
Stardeals to offer daily deals in Australia. The two firms settled outside of the court in July 2011, and groupon.com.au is now owned by Groupon and the firm has phased out Stardeals. While the details of the settlement have not been released, it is rumored that Groupon paid Scoopon far more than $286,000 it initially offered.
27
Becoming a Public Company
Firms often go public and list their shares for trading on stock exchanges for a number of reasons, but the most common are the need for capital for the firm and need for liquidity for initial investors. As the firm grows and requires more capital to fund its operations and expansion, financing through internal sources and private investors becomes difficult and costly.
Through a public offering of stock, a firm can tap into a larger pool of capital, which may enable it to raise additional funds at a lower cost than through other sources. In its S-1, Groupon discloses that it plans to use the proceeds from its IPO “for working capital and other general corporate purposes, which may include the acquisition of other businesses, products or technologies.”
28
Another motivation to go public is to offer early investors as well as employees an opportunity to realize gains on their investments and employee stock options. Additionally,
SEC rules require companies with more than 500 investors to file for IPO, though some exceptions may be granted.
Generally, most companies wait to go public until they have reached a certain level of maturity. The median age of venture capital backed firms at the time of IPO over the past three decades is eight years old.
29
However, this trend does not necessarily hold true for technology ventures, which tend to go public at an earlier stage of their life cycle. The median age of IPO companies went down during the tech bubble, but has since increased back toward earlier levels
(see chart in Appendix C).
The process of becoming a public company is a lengthy and arduous one with numerous regulatory requirements and market expectations a firm must meet. First, it must assemble a team that will lead and manage the IPO process. PricewaterhouseCoopers explains that the team typically consists of company management, company attorneys, an independent auditor, an accounting advisor, underwriters, and underwriters’ attorneys.
30
The firm must then perform due diligence on its business and review and audit its financials. Once the businesses and documentations are in order, the company will submit the Form S-1, the official registration form for an IPO, with the SEC. The SEC will then perform a review, and often requests the firm to provide further explanations or make amendments to the S-1. At this point, a firm would typically form a syndication of investment bankers and embark on investor road-shows to assess the demand for the stock and to sell the firm to potential investors. The road-show is a critical step in the IPO process during which you must communicate the firm’s potential and the quality of its management team to institutional investors. Finally, the SEC will declare the Form S-1
“effective” and the firm’s shares will debut on a stock exchange.
During the period between the commencement of the public offering process and 90 days following the effective date of the Form S-1, the firm going public is subject to the SEC
5

regulation called the “quiet period.” During this period, the firm is banned from publicly promoting itself. Groupon, in its typical fashion, describes the “quiet period” as follows:
During this sensitive time, it is the duty of the press to force the adolescent company through a series of brutal hazing rituals, designed to desensitize it to public criticism. This tough love helps the naively optimistic company to thicken its skin, atrophy its soul, and finally grow up into a real corporation.
31
CHALLENGES IN GROUPON’S IPO PROCESS
Culture Clash with Investors
One of the significant risks for Groupon as it takes the company public is that its quirky culture and unique communication strategies are likely to clash with investors’ demands for reliable, credible information. Appendix D compares the biographies of CEO Andrew Mason and CFO
Jason Child that appear on the company website with those that appear in the Form S-1. As you can see, the website biographies engage in the same sorts of inside jokes, half-truths, and exaggerations used in the company’s deal descriptions. Moreover, these informal biographies hardly mention the executives’ business experience at all. In contrast, the biographies in the
Form S-1 are much more traditional, focusing largely on the executives’ credentials. The stark contrast between the two sets of biographies demonstrates the challenges in adapting Groupon’s offbeat communication methods and cultural quirks to the rigid demands of the financial community. As it becomes a public company, Groupon will have to decide how to address the challenge posed in reconciling these divergent interests.
The Form S-1: Groupon’s Financials
With the filing of its Form S-1, Groupon offered the first public disclosure of its full financial information. This was an important opportunity for the company to impress investors with the company’s growth as well as ease their concerns about its long-term prospects. The financial statements, as initially disclosed, did demonstrate tremendous growth in the company’s revenues and subscriber base. However, this growth was built largely through aggressive marketing spending and expansion into new markets. The costs of these efforts were so large that Groupon posted significant operating losses despite its impressive top-line growth trajectory. (Please see
Appendix E for the full income statement from Groupon’s initial S-1 filing). Despite its strong growth, investors still had reason to be concerned about the company’s long-term viability.
In his letter to potential shareholders in the Form S-1 (printed in full in Appendix A),
Mason notes that the company does not measure itself in “conventional ways” and lays out the three primary financial metrics that Groupon’s management team uses internally to assess the company’s performance:
1.
Gross profit (i.e. Revenue less Payments to merchants): This amount represents the amount of money that the company keeps for every Groupon it sells. In the mind of
6

management, this number represents the value added by the company to the merchants who advertise on its site.
2.
Free cash flow (i.e. Operating cash flow less Capital expenditures): The ability to generate consistently positive free cash flow is used by management as an indicator of long-term financial stability.
3.
Adjusted consolidated segment operating income or ACSOI (Operating income before new subscriber acquisition costs, adjusted where necessary to exclude onetime items): Management sees new subscriber acquisition costs as an expense that is integral to the long-term success of the business and expects to earn some return on these expensed items over time. In light of this view, management sees Adjusted CSOI as the profitability of the company before these investments in growth are expensed.
32
Unfortunately for Groupon, the regulators, accountants, and investment analysts looking at these three metrics found that they had serious concerns about Groupon’s use of two of them.
The issues concerning gross profit largely centered on Groupon’s revenue recognition practices.
In the initial release of its financial statements, Groupon was counting every dollar spent on
Groupons as revenue. However, accountants and regulators argued that Groupon was not doing anything to earn the share of these purchases that flowed back to merchants, and therefore questioned whether it should be recognized as revenue. Essentially, these parties argued that the amount Groupon was calling gross profit was actually the appropriate number for revenue.
Potential investors and regulators also had concerns about the Adjusted CSOI measure that Groupon had created. As noted above, the company’s U.S. GAAP operating income was actually a large loss, particularly in the most recent periods. Many investors may see these losses as completely understandable in light of the company’s efforts to retain its position of strength in a highly-competitive and fast-growing industry. However, the financial community seemed wary about Groupon’s use of a metric that turns a GAAP Operating loss into a positive income figure by simply adding back the largest chunk of operating costs. They found Groupon’s justification particularly suspect in light of the fact that many companies have marketing and subscriber acquisition costs and none of them capitalize these expenses.
Andrew Mason versus the Financial Establishment
In response to these challenges to the company’s methods, Mason became frustrated and defensive. In a long email to all of the company’s employees, he defended its process and prospects. This email is included in its entirely in Appendix F, but the excerpts below offer a telling glimpse into Mason’s feeling toward the company’s critics in the financial community:
[T]he degree to which we’re getting the s**t kicked out of us in the press had finally crossed the threshold from “annoying” to “hilarious.”[…] I’ve never been more confident and excited about the future of our business. […] For now we must patiently and silently endure a bit more public criticism as we prepare to birth this IPO baby… having seen the ultrasound, I can promise you [it] is not one of those uglies.
7

While it may have helped Mason vent some frustrations and rally the employees around the company, this email aroused further concerns regarding Groupon’s credibility in the financial community. As was mentioned earlier, between the time it files its Form S-1 and the time the
SEC declares that registration statement effective, a company going public is in a quiet period , during which it is banned from publicly promoting the company. It is not clear if Mason did not know he was breaching this requirement or just did not care, but the SEC declared that this email was a violation of the quiet period and that Groupon would be sanctioned. After this impulsive move by Mason, the financial community escalated its concerns that Groupon’s management, and Mason in particular, was not ready to face the stricter regulations and scrutiny involved in being a public company.
The SEC Responds: Amending the Form S-1
In the course of its review of the company’s financial statements, the SEC required that Groupon make some significant changes to its financial statements, mostly related to the issues outlined above. The SEC required that Groupon adjust its revenue recognition and restate its revenue and gross profit. While the restatement had no substantial impact on the bottom line (because roughly the same amounts were taken out of both revenue and costs of sales) or on the company’s impressive revenue growth, the restatement essentially meant that Groupon’s revenues were cut in half overnight. Because fast-growing technology and internet companies
(especially loss-making ones like Groupon) are often valued as a multiple of their revenues, this sharp decrease in the revenue number has the potential to significantly affect Groupon’s possible valuation by investors. The SEC also decided that it could not endorse the use of ACSOI, leaving Groupon no choice but to show only the negative operating income with no adjustment for marketing costs. (Please see Appendix G for the full income statement from Groupon’s amended S-1 filing).
Tech IPO Market and General Economic Environment
The first half of 2011 saw a strong IPO market, especially in the tech industry, setting a prime stage for Groupon’s IPO. On January 27, online media company Demand Media went public and was valued at approximately $1.5 billion. Later in May, professional networking site
LinkedIn and Russian search engine Yandex also received strong investor interest, and were valued at approximately $4.2 billion and $8 billion, respectively. All these and many other webbased firms that went public traded above their offer price on the first day of listing, indicating strong investor demand for technology companies. Henri Leveque, Partner at
PricewaterhouseCoopers, observed that “This is one of the best first quarters we’ve seen in years, demonstrating the increasing attractiveness of the U.S. IPO markets for generating capital and providing liquidity for financial sponsors.”
33
Furthermore, industry giant Facebook is considering going public in 2012, and some believe that it could be valued at as much as $100 billion.
34
It appeared that investors had strong appetite for companies with high growth potential at the time of the filing of the Form S-1, which gave Groupon management confidence that the company could get the valuation it is seeking. (See chart in Appendix H for Q1 IPO Volume and
Proceeds Raised over the past eight years)
8

reevaluat te its planned lic offering. As uncertai inty over the late July, for pon to te as indica ted by the C rd Options E market, the index . T tically incre he global ased lity Index, th f fear or withdrew their initial mberg noted t
PO in one w that during th eek in more
August 8, m than a decad
35 ore to respond t to SEC inqu iries.
36
On S ing delaying its IPO due volatility.
37 orted that
Move move in t the bid to tak s next is still looki blic ent financial l position an as well a s the recent turmoil in fi inancial mark ble investor road-show i in cing ly ask tough questions t be an easy feat to regai in investor tr rust.
9

Now put yourself in the position of Groupon management team. How would you approach the strategy for communicating with investors? In particular, how should the company and its management team answer the following questions related to its financial outlook and communication strategy:

Should you proceed with the IPO process or should you delay it?

If it’s not the right time to go public, why not? What sort of issues must Groupon overcome to be ready to be a publicly-traded firm?

If it should go public, what message do you want to convey to investors in the road show?

How do you plan to ease investor and analyst concerns about the company’s business model and the mistake it has made in the IPO process?

What sort of investors should you be targeting?

How do you plan to reconcile Groupon’s offbeat culture with investor expectations and how should Groupon communicate more effectively with its investors in the future?
10

Appendix A – Letter from Andrew Mason to potential stockholders on the Form S-1
38
Dear Potential Stockholders,
On the day of this writing, Groupon's over 9,600 employees offered more than 1,000 daily deals to 115 million subscribers across 45 countries and have sold to date over 90 million Groupons. Reaching this scale in about three years required a great deal of operating flexibility, dating back to Groupon's founding.
Before Groupon, there was The Point—a website launched in November 2007 after my former employer and one of my co-founders, Eric Lefkofsky, asked me to leave graduate school so we could start a business. The Point is a social action platform that lets anyone organize a campaign asking others to give money or take action as a group, but only once a "tipping point" of people agree to participate.
I started The Point to empower the little guy and solve the world's unsolvable problems. A year later, I started
Groupon to get Eric to stop bugging me to find a business model. Groupon, which started as a side project in
October 2008, applied The Point's technology to group buying. By January 2009, its popularity soaring, we had fully shifted our attention to Groupon.
I'm writing this letter to provide some insight into how we run Groupon. While we're looking forward to being a public company, we intend to continue operating according to the long-term focused principles that have gotten us to this point. These include:
We aggressively invest in growth.
We spend a lot of money acquiring new subscribers because we can measure the return and believe in the longterm value of the marketplace we're creating. When we see opportunities to invest in long-term growth expect that we will pursue them regardless of the short-term impact on our profitability.
We are always reinventing ourselves.
In our early days, each Groupon market featured only one deal per day. The model was built around our limitations: We had a tiny community of customers and merchants.
As we grew, we ran into the opposite problem. Overwhelming demand from merchants, with nine-month waiting lists in some markets, left merchant demand unfilled and contributed to hundreds of Groupon clones springing up around the world. And as our customer base grew larger, our merchants had an entirely new problem:
Dealing with too many customers instead of too few.
To adapt, we increased our investment in technology and released deal targeting, enabling us to feature different deals for different subscribers in the same market based on their personal preferences. In addition to providing a more relevant customer experience, this helped us to manage the flow of customers and opened the
Groupon marketplace to more merchants, in turn increasing the number and variety of deals offered through our marketplace.
Today, we are pursuing models of reinvention that would not be possible without the critical mass of customers and merchants we have achieved. Groupon NOW, for example, allows customers to pull deals on demand for immediate redemption, and helps keep merchants bustling throughout the day.
Expect us to make ambitious bets in technology and product innovation that distract us from our current business. Some bets we'll get right, and others we'll get wrong, but we think it's the only way to continuously build exciting products.
We are unusual and we like it that way.
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We want the time people spend with Groupon to be memorable. Life is too short to be a boring company.
Whether it's with a deal for something unusual, such as fire dancing classes, or a marketing campaign such as
Grouspawn
(1)
, we seek to create experiences for our customers that make today different enough from yesterday to justify getting out of bed. While weighted toward the measurable, our decision-making process also considers what we feel in our gut to be great for our customers and merchants, even if it can't be quantified immediately.
Our customers and merchants are what we care about.
After selling out on our original mission of saving the world to start hawking coupons, in order to live with ourselves, we vowed to make Groupon a service that people love using. We set out to upturn the stigmas created by traditional discounting services, trusting that nothing would be as crucial to our long-term success as happy customers and merchants. We put our phone number on our printed Groupons and built a huge customer service operation, manned in part with members of Chicago's improv community. We developed a sophisticated, multistage process to pick deals from high quality merchants with vigorously fact-checked editorial content. We built a dedicated merchant services team that works with our merchant partners to ensure satisfaction. And we have a completely open return policy, giving customers a refund if they ever feel like Groupon let them down. We do these things to make our customers and merchants happy, believing that market success will follow.
We believe that when once-great companies fall, they don't lose to competitors, they lose to themselves—and that happens when they stop focusing on making people happy. As such, we do not intend to be reactive to competitors. We will watch them, but we won't distract ourselves with decisions that aren't designed primarily to make our customers and merchants happy.
We don't measure ourselves in conventional ways.
There are three main financial metrics that we track internally.
First, we track revenue—our gross billings less the amounts we pay our merchants—because we believe it is the best proxy for the value we're creating. Second, we measure free cash flow, which is our cash flow from operations, reduced by our capital expenditures. We use this measure as an indicator of our long-term financial stability.
Third, we track Adjusted Consolidated Segment Operating Income (ACSOI) which is our Consolidated
Segment Operating Income (CSOI) reported under U.S. GAAP before our new subscriber acquisition costs. We exclude those costs because, unlike our other marketing expenses, they are an up-front investment to acquire new subscribers that we expect to decline significantly as this period of rapid expansion in our subscriber base concludes and we determine that the returns on such investment are no longer attractive. While we track this management metric internally to gauge our performance, we encourage you to base your investment decision on whatever metrics make you comfortable.
If you're thinking about investing, hopefully it's because, like me, you believe that Grouponis better positioned than any company in history to reshape local commerce. The speed of our growth reflects the enormous opportunity before us to create a more efficient local marketplace. As with any business in a new industry, success for our investors is not guaranteed. We have yet to reach sustained profitability and we have no shortage of competition.
Our path will include some moments of brilliance and others of sheer stupidity. Knowing that this will at times be a bumpy ride, we thank you for considering joining us.
[Andrew D. Mason]
(1)
Grouspawn is a foundation we created that awards college scholarships to babies whose parents used a Groupon on their first date.
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Appendix B – Splitting of proceeds between Groupon and merchants
39
100%
80%
60%
40%
20%
Merchants' Share
Groupon's Share
0%
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011
Appendix C – Median Age of Firms Going Public (1980-2010; long-term avg. = 8 years)
40
20
15
10
5
0
Median Age of Firms Going Public
Appendix D – Comparison of Executive Biographies (Groupon website vs. public filings)
Andrew Mason (CEO & Co-Founder)
Groupon Website
“Andrew Mason is the founder of Groupon as well as The Point , the collective action platform from which Groupon was born. Andrew's mostly unremarkable existence began in Pittsburgh,
PA; he moved to Chicago in 1999 to attend Northwestern University, where he lives today with his girlfriend and over 20 cats. Andrew graduated with a degree in music, the uselessness of which served as a chief inspiration to not be useless. Out of college, Andrew became a software developer by no ambition of his own, but via a series of acquaintances offering to give him money to do incrementally harder stuff on computers. Excited by the power of technology to change the world, Andrew developed Policy Tree , a policy debate visualization tool, and won a scholarship to attend the University of Chicago Harris School of Public Policy in 2006. In school for only 3 months, the flighty Andrew dropped out after receiving an unexpected offer to fund the idea that would become The Point. The Point, a ground-breaking approach to online
13

collective action and fundraising, launched in November 2007. One year later, Andrew founded
Groupon, leveraging the collective buying technology of The Point to make it easier (and cheaper) to experience all the great stuff in Chicago. At various points in his life, Andrew has also started businesses to deliver bagels as if they were newspapers, and sell muffins with cranberries that he found in his backyard to people living on his street. When he isn't working,
Andrew spends most of his time writing his life coach training book, Unleash the Power Within the Power Within: Self Help For Self Helpers .”
41
Form S-1
“Andrew D. Mason is a co-founder of the Company and has served as our Chief Executive
Officer and a director since our inception. In 2007, Mr. Mason co-founded The Point, a web platform that enables users to promote collective action to support social, educational and civic causes, from which Groupon evolved. Prior to co-founding The Point, Mr. Mason worked as a computer programmer with InnerWorkings, Inc. (NASDAQ: INWK). Mr. Mason received his
Bachelor of Arts from Northwestern University. Mr. Mason brings to our Board the perspective and experience as one of our founders and as Chief Executive Officer. Mr. Mason was elected to the Board pursuant to voting rights granted to holders of our common stock and preferred stock under our voting agreement, which will be terminated upon the closing of this offering.”
42
Jason Child (CFO)
Groupon Website
“The only businessician in a family of artists, Jason Child has run 14 marathons, each one a kinetic sculpture of physical art. With his wife and two children strapped to his back, Jason also has skied down Austria's toughest mountain without slipping and falling into a coma even once.
Before fighting off a midlife crisis and joining Groupon, Jason worked as CFO and VP of
Finance for Amazon.com's international division, and he has lived and worked in Munich,
Tokyo, and Seattle. Jason enjoys traveling with his family, and one day hopes to complete a whirlwind tour of every Groupon country either for business purposes or with a juggling troupe composed of his cousins and father.”
43
Form S-1
“ Jason E. Child has served as our Chief Financial Officer since December 2010. From March
1999 through December 2010, Mr. Child held several positions with Amazon.com, Inc.
(NASDAQ: AMZN), including Vice President of Finance, International from April 2007 to
December 2010, Vice President of Finance, Asia from July 2006 to July 2007, Director of
Finance, Amazon Germany from April 2004 to July 2006, Director of Investor Relations from
April 2003 to April 2004, Director of Finance, Worldwide Application Software from November
2001 to April 2003, Director of Finance, Marketing and Business Development from November
2000 to November 2001 and Global Controller from October 1999 to November 2000. Prior to joining Amazon.com, Mr. Child spent more than seven years at Arthur Andersen where he was a
C.P.A. and a consulting manager. Mr. Child received his Bachelor of Arts from the Foster
School of Business at the University of Washington.”
44
14

Appendix E – Groupon Financials (as stated on initial Form S-1)
45
Consolidated Statements of Operations Data:
Revenue
Cost of revenue
Gross profit
Operating expenses:
Marketing
Selling, general and administrative
Acquisition-related
Total operating expenses
(Loss) income from operations
Interest and other income (expense), net
Equity-method investment activity, net of tax
(Loss) income before provision for income taxes
Provision (benefit) for income taxes
Net (loss) income
Less: Net loss attributable to noncontrolling interests
Net (loss) income attributable to Groupon, Inc .
Dividends on preferred stock
Redemption of preferred stock in excess of carrying value
Adjustment of redeemable noncontrolling interests to redemption value
Preferred stock distributions
Net (loss) income attributable to common stockholders
Net (loss) income per share
Basic
Diluted
Weighted average number of shares outstanding
Basic
Diluted
$
Year Ended December 31,
1,637
163
1,474
—
7,458
—
12,006
233,913
203,183
700,298
Three Months Ended March 31,
2008 2009 2010 2010 2011
(unaudited)
(dollars in thousands, except share data)
(unaudited)
94 $ 30,471 $ 713,365 $ 44,236 $ 644,728
89 19,542 433,411 24,251 374,728
5 10,929 279,954 19,985 270,000
4,548 263,202
(1,632) (1,077 ) (420,344)
90
—
(16 )
—
284
—
(1,542) (1,093 ) (420,060)
— 248 (6,674)
(1,542) (1,341 ) (413,386)
— — 23,746
(1,542) (1,341 ) (389,640)
(277)
—
(5,575
—
) (1,362)
(52,893)
3,988
11,414
208,209
—
387,148
7,426 178,939
—
8,571 (117,148)
3
—
1,060
(882)
8,574 (116,970)
23 (3,079)
8,551 (113,891)
— 11,223
8,551 (102,668)
(523 ) —
— (34,327)
$
—
(339)
(2,158) $
— (12,425)
— —
(6,916 ) $ (456,320) $
— (9,485)
— —
8,028 $ (146,480)
$
$
(0.01) $
(0.01) $
(0.04
(0.04
)
)
$
$
(2.66)
(2.66)
$
$
0.03
0.03
$
$
(0.95)
(0.95)
166,738,129 168,604,142 171,349,386 172,966,829 153,924,706
166,738,129 168,604,142 171,349,386 245,962,571 153,924,706
(1)
(2)
(3)
(4)
Subscribers (1)
Cumulative customers (2)
2008
Key Operating Metrics:
Featured merchants
Groupons sold (4)
*
*
(3) *
*
*
Not available
Year Ended December 31,
2009
1,807,278
375,099
2,695
1,248,792
2010
50,583,805
9,031,807
66,289
30,296,070
2010
Three Months Ended
March 31,
3,434,610
874,017
2,903
1,760,398
2011
83,100,006
15,803,995
56,781
28,094,743
Reflects the total number of subscribers on the last day of the applicable period.
Reflects the total number of unique customers that have purchased Groupons from January 1, 2009 through the last day of the applicable period.
Reflects the total number of merchants featured in the applicable period.
Reflects the total number of Groupons sold in the applicable period.
15

Appendix F – Andrew Mason’s Email to Employees
46
Dear Groupon,
This weekend, I did a Google News search on our company — my first in awhile. The first story that popped up was called The Fall of Groupon: Is the Daily Deals Site Running Out of Cash? I laughed when I read the headline (in the car by myself, weirdly). First — with this article, the degree to which we’re getting the shit kicked out of us in the press had finally crossed the threshold from “annoying” to “hilarious.” Second, I was struck by the irony — I had just finished a board meeting last Wednesday saying this to myself: I’ve never been more confident and excited about the future of our business.
I realize that this sounds like the kind of thing that CEOs say when they’re trying to pep people up. First of all —
I’m all about not pepping people up. If you don’t believe me, just ask my fiancée, Jenny “why don’t you ever say anything nice about me” Gillespie. Want another example? Look at the magazine covers in our lobby, which are there to make you sad by reminding you of the impermanence of success.
I’m going to spend the rest of this email explaining why I’m so excited. You need some ammo to argue back against your blog-reading “friends” (silently argue in your mind, that is — you can’t actually say any of this yet), and I’ve been told that the “what have you ever done with your life that’s so great?” rebuttal isn’t working as well for you guys as it has for me.
While we’ve bitten our tongues and allowed insane accusations (like in the article above) to go unchallenged publicly, it’s important to me that you have the context necessary to brush this stuff off.
I’ll summarize my excitement with four points: 1) Growth in our core business is strong 2) Our investments in the future — businesses like Getaways & NOW — look great, 3) We are pulling away from competition, and 4) We’ve built a great team that I would pit against anyone. In other words, all the stuff that one would want to look good? It looks good.
Many of the long-term unknowns of our business are becoming known, and we like the answers. I will now elaborate in a level of financial detail that will give Jason Child a stomach ulcer.
1. GROWTH IN THE CORE BUSINESS
Thanks to a tremendous effort by our sales team, August in the U.S. is shaping up to be a pivotal month. It appears that will revenues grow by about 12% over last month (which is a lot), while we cut our marketing expenses by 20% in the same period.
Beyond their obvious goodness, these numbers are important because they answer one of the main criticisms thrown at us in the past few months, relating to a metric we put in the S-1 called ACSOI (adjusted consolidated segment operating income) to help people understand how we think about marketing expenses. The reason everyone in the world seems to hate ACSOI is that it makes us look magically profitable by subtracting a bunch of our customer acquisition marketing costs from our expenses. The reason we didn’t realize everyone in the world would hate
ACSOI (no, it’s not the same reason we didn’t realize everyone in the world would hate our Superbowl ad), is that we think it actually does a pretty good job at describing our marketing expenses in a steady state –we just didn’t realize there would be so many skeptics. I think it’s worth going deep on this one more time — brace yourself.
Our internal forecast shows two different types of marketing: what I’ll call “normal marketing” — which is NOT excluded from ACSOI — and “customer acquisition marketing,” which is. The way Groupon spends on marketing is unique in three ways:
16

1. We are currently spending more than just about any company ever on marketing — in Q2, we spent nearly 20% of our net revenue on marketing, while a typical company spends less than 5%. Why do we spend so much? The simple answer is “because it works.” But thats only part of what makes our situation special.
2. Our marketing — at least the customer acquisition marketing that we remove from ACSOI — is designed to add people to our own long-term marketing channel — our daily email list. Once we have a customer’s email, we can continually market to them at no additional cost. Compare this to Johnson and Johnson, McDonald’s, or most other companies. If I’m a Johnson, and I’m trying to sell you a box of Band Aids, I have to keep spending money on commercials and magazine ads and stuff to remind you about how sweet Band Aids are, even after you’ve bought your first box. With Groupon, we just spend money one time to get you on our email list, and then every day we email you a reminder of the sweetness of our metaphorical Band Aid. There is no cost of reacquisition — that’s unusual (and we created ACSOI to point that out). If Johnson wanted to follow the Groupon strategy, he would have to start a free daily newspaper about bandages and then run Band Aid ads in it every day.
3. Eventually, we’ll ramp down marketing just as fast as we ramped it up, reducing the customer acquisition part of our marketing expenses (the piece that we remove in ACSOI) to nominal levels. We are spending a ton now because we’re acquiring as many subscribers as we can as quickly as we can. We aren’t paying attention to marketing budget
(just marketing ROI) in the way a normal company would, because we know that even if we wanted to continue to spend at these levels, we would eventually run out of new subscribers to acquire. So our customer acquisition spend drops severely to reflect the fact that eventually we’ll run out of people we can add to our email list. We view this internally as a very large one-time expense and then our job forever after will be to continually convert these subscribers into customers and to make sure our customers keep buying from us. Ongoing, the normal marketing dollars we spend are not something we would remove from our internal calculation of ACSOI.
I tried my best to explain this simply, but it’s not lost on me that if you actually understood this, you probably had to read it three times. It’s not easy stuff. It’s much easier to assume that we’re goons. So people can be forgiven for being suspicious. In fact, feel a little bad about how downhearted the critics will be when we don’t turn out to be a
Ponzi scheme — those are good impulses for journalists to have, and I hope our non-evil ways don’t destroy their spirits.
Anyway, there’s a reason that I just went on about ACSOI. One of the questions that skeptics ask is, “when you ramp down marketing, won’t revenues stop growing as well? Aren’t you just buying growth?” Over the past several months we’ve been consistently reducing our marketing spend and yet revenues are still increasing at a significant pace. In Q1 of this year, marketing represented 32.3% of our net revenues. By the end of Q2 it had fallen to 19.4%.
And it has continued to fall over the past several months all because we’ve been investing in our own long-term marketing channel — our email list.
Internationally we see the same trends — marketing is down, but revenues are up — every country is either losing less or making more. Even in young markets like Korea, where we’re still making massive investments, we’re seeing unprecedented growth. We started building our Korean team this January, despite the presence of two competitors that were larger than any we’d previously battled from behind. Thanks to the brilliant execution of the
Korean team, we are set to be the market leader within months. We’ve never had a country grow as fast as Korea!
What about our joint-venture with Tencent in China? Did you read the article that Gaopeng’s CEO has kidnapped the first born children of all our employees and is putting them to work building a laser beam he’ll use to slice the moon in half? It turns out that that one isn’t true either. China is definitely a different market, but every month we inch closer to profitability. As has been our strategy in launching other countries — Germany, France, and the UK, included — our China growth strategy was to hire quickly and manage out the bottom performers. So far, that strategy has improved our competitive position in China from #3,000 to #8. Will we one day reach the dominant status we enjoy in most (come on, Switzerland!) other countries? It’s too soon to tell, but there’s no question in my mind that we’re building a business that will be around for the long haul.
2. NEW BUSINESS LINES ARE BOOMING
17

Travel and Product are enormous opportunities. After only a few months, they’re already making up 20% of revenue in some countries. We sold $2M worth of mattresses in the UK — in one day! Groupon Getaways will do $10M in its first calendar month — which you might think is awesome, but we’re actually disappointed with those results because we know how much better we’ll be doing soon.
While there’s still a ton of work to do, Groupon Now! continues to see weekly double digit growth. The model works and I believe it will play a major part in the future of our global business as more merchants and customers join the marketplace.
3. WE ARE PULLING AWAY FROM COMPETITION
If there’s a question I’ve received from Groupon skeptics more than any other, it’s, “how will you fend off the competition — especially massive companies like Google and Facebook?” I could give a dozen reasons to bet on
Groupon, but it’s impossible to predict the future or the actions of others. Well, now the sleeping giants have woken up — and the numbers are showing that what was proven true with literally thousands of other competitors is just as true with the incumbents of the Internet: it’s kind of hard to build a Groupon. And since anyone with an Internet connection can track the performance of our competitors, I can be more specific:
Google Offers is small and not growing. In the three markets where we compete, we are 450% of their size.
Yelp is small and not growing. In the 15 markets where we compete, our daily deals are 500% of their size.
Living Social’s U.S. local business is about 1/3rd our size in revenue (and smaller in GP) and has shrunk relative to us in the last several months. This, in part, appears to be driving them toward short-sighted tactics to buy revenue, like buying gift certificates from national retailers at full price and then paying out of their own pocket to give the appearance of a 50% off deal. Our marketing team has tested this tactic enough to know that it’s generally a bad idea, and not a profitable form of customer acquisition.
Facebook sales are harder to track, but are even less significant at present.
My point is not that our competitors will fail — some may actually develop sustainable businesses, or even grow — after all, local commerce is an enormous market. The real point is that our business is a lot harder to build than people realize and our scale creates competitive advantages that even the largest technology companies are having trouble penetrating. And with the launch of NOW, I suspect our competition will have an even harder time in light of the natural barriers to entry that are needed to build a real-time local deals marketplace.
4. OUR TEAM
This is the fluffiest of the four points, but maybe the most important — we’ve built a global team of hungry entrepreneurial operators and seasoned executives that rivals any team I know of. Almost every day, I find myself in a scenario where I silently think, “I can’t believe I got this person to work for me — that failure of judgement is perhaps their single flaw.”
I point out the team because while today the business is strong and it appears we must endure success for awhile longer (despite its impermanence), we will inevitably be challenged with issues we didn’t predict — and when that happens, the quality of our team will be a deciding factor in our ultimate long-term success.
FINAL THOUGHTS
I wrote this email because when I read some of the press this weekend, I realized a rational person could read this stuff and wrongly conclude that we’re in trouble. The irony is hopefully clear: We’ve never been stronger.
18

And while we’ve refrained from defending ourselves publicly, you’ve continued to create our best defense, with every department innovating new practices that are taking our business to the next level. Thanks for staying tough, determined, and agile throughout this process. For now we must patiently and silently endure a bit more public criticism as we prepare to birth this IPO baby — a breed for which there are no epidurals. If there’s a silver lining, it’s that we’re almost on the other side, and the negativity leaves us well-positioned to exceed expectations with an
IPO baby that, having seen the ultrasound, I can promise you is not one of those uglies.
I’ve been as candid as possible — hope this sheds some light on things. Reply with your questions if anything remains unclear. Amidst all this, I hope you remember what we’re doing here — we are making history together. I guess you don’t get to build something that reshapes the local commerce ecosytem without getting a few bruises.
I’m so proud of the work we’re doing, and I feel extraordinarily lucky to work on what I think is the best thing that’s happened to small businesses since the telephone We’ve invented something that is catalyzing millions of dollars of local commerce every single day in 45 countries and fills the lives of millions of customers with unforgettable experiences — it’s pretty remarkable.
Looking forward to getting this behind us!
Andrew
P.S.: I almost forgot to address the nonsense about us running out of money in the article above. If you apply the same logic used in the article, you’d have concluded long ago that companies like Amazon and Wal-Mart were running out of cash too. Both have often had payables far in excess of their cash. Finance geeks call this a working capital deficit. It’s normal, manageable and a lot of folks actually believe it’s good thing and would kill to get paid from their customers long before they have to pay their suppliers. We are generating cash, not losing it — we generated $25M in cash last quarter alone, adding to the $200M we had before. In other words, we’re doing the opposite of running out of money.
Appendix G – Groupon Financials (as restated on amended Form S-1)
47
Year Ended December 31,
Six Months Ended
June 30,
2008 2009 2010 2010 2011
(Restated) (1) (Restated) (1) (Restated) (1) (Restated) (1) (Restated) (1)
(unaudited) (unaudited)
(dollars in thousands, except share data)
Consolidated Statements of Operations Data:
Revenue (gross billings of $94, $34,082, $745,348, $135,807 and $1,597,423, respectively) $
Costs and expenses:
Cost of revenue
Marketing
Selling, general and administrative
Acquisition-related
Total operating expenses
Loss from operations
Interest and other income (expense), net
Net loss
Equity-method investment activity, net of tax
Loss before provision for income taxes
Provision (benefit) for income taxes
Less: Net loss attributable to noncontrolling interests
Net loss income attributable to Groupon, Inc.
Dividends on preferred stock
Redemption of preferred stock in excess of carrying value
Adjustment of redeemable noncontrolling interests to redemption value
Preferred stock distributions
Net loss attributable to common stockholders
Net loss per share
Basic
Diluted
— 203,183 9,434 —
1,637 15,617 733,285 87,186 906,280
(1,632
90
)
—
(1,077) (420,344) (28,248) (218,175)
(16)
—
284
—
(96) 1,539
— (8,763)
(1,542 ) (1,093) (420,060) (28,344) (225,399)
— 248 (6,674) (905) (1,732)
(1,542 ) (1,341) (413,386) (27,439) (223,667)
— — 23,746 61 19,759
(1,542 ) (1,341) (389,640) (27,378) (203,908)
(277
—
)
—
(339 )
(5,575)
—
—
—
(1,362)
(52,893)
(12,425)
—
(1,046)
— (34,327)
—
—
—
(15,651)
—
$ (2,158 ) $ (6,916) $ (456,320) $ (28,424) $ (253,886)
$
$
5
6 4,355 32,494 4,024 66,522
163 4,873 284,348 39,848 432,093
1,468
—
(0.01
(0.01
)
)
$
$
$
14,540
6,389
(0.04)
(0.04)
$
$
$
312,941
213,260
(2.66)
(2.66)
$
$
$
58,938
33,880
(0.17)
(0.17)
$
$
$
688,105
407,665
(1.66)
(1.66)
19

Weighted average number of shares outstanding
Basic
Diluted
Other Financial Data:
Segment operating (loss) income:
North America
International
CSOI (1)
(1)
166,738,129 168,604,142 171,349,386 169,048,421 152,813,014
166,738,129 168,604,142 171,349,386 169,048,421 152,813,014
$ (1,608 ) $
—
$ (1,608 ) $
(962) $ (10,437)
— (170,556) (23,047) (128,314)
(962) $ (180,993) $ (14,738) $ (160,593)
$ 8,309 $ (32,279)
The Consolidated Financial Statements have been restated for the presentation of revenue on a net basis for all periods presented. See Note 2 to our Consolidated Financial Statements. In addition, the six month period ended June 30, 2011 has been restated to reduce selling, general and administrative expense to correct for an error. See Note 2 to our Condensed Consolidated Financial Statements.
(2) Consolidated segment operating (loss) income, or CSOI, is a non-GAAP financial measure. See "—Selected Consolidated Financial and Other
Data—Non-GAAP Financial Measures" for a reconciliation of this measure to the most applicable financial measure under U.S. GAAP. We do not allocate stock-based compensation and acquisition-related expenses to the segments. See Note 14 "Segment Information" of Notes to
Consolidated Financial Statements and Note 15 " Segment Information " of Notes to Condensed Consolidated Financial Statements (Unaudited) for additional information.
(6)
(7)
(4)
(5)
(8)
(9)
*
Operating Metrics:
Gross billings
Subscribers (2)
(1)
Featured merchants
Groupons sold (5)
Cumulative customers (3)
(4)
Average revenue per subscriber (6)
Average cumulative Groupons sold per customer
Average revenue per Groupon sold
Cumulative repeat customers (9)
(8)
(7)
2008
*
*
*
*
$ 94
*
$
*
*
$
$
*
Year Ended December 31,
2009
34,082
1,807,278
$
375,099
2,695
1,248,792
3.3
11.6
162,323
8.0 $
$
2010
745,348
50,583,805
$
9,031,807
66,289
30,296,070
11.9 $
3.5
10.3
4,483,976
$
2010
Six Months Ended
June 30,
2011
135,807
10,445,521
$
2,379,611
12,468
5,822,856
9.6 $
3.0
10.1
1,056,966
$
1,597,423
115,717,299
23,072,600
135,247
60,620,482
8.3
4.0
11.4
12,066,676
Not available
(1) Reflects the gross amounts collected from customers for Groupons sold, excluding any applicable taxes and net of estimated refunds, in the applicable period.
(2) Reflects the total number of subscribers who had a Groupon account on the last day of the applicable period, less individuals who have unsubscribed. May include individual subscribers with multiple registrations because the information we collect from subscribers does not permit us to identify when a subscriber may have created multiple accounts, nor do we prevent subscribers from creating multiple accounts.
(3) Reflects the total number of unique customers who have purchased Groupons from January 1, 2009 through the end of the applicable period.
May include individual customers with multiple registrations.
Reflects the total number of merchants featured in the applicable period.
Reflects the total number of Groupons sold in the applicable period.
Reflects the total number of customers who have purchased more than one Groupon from January 1, 2009 through the end of the applicable period.
Reflects the average revenue generated per average number of subscribers in the applicable period.
Reflects the average revenue generated per Groupon sold in the applicable period.
Reflects the average number of Groupons sold per cumulative repeat customer from January 1, 2009 through the end of the applicable period.
20

Appendix H – IPO Volume and Proceeds Raised in Q1 (2004-2001)
48
Q1 IPO Volume and Proceeds Raised
$25.0
$20.0
$15.0
Volume Proceeds
$10.0
68
$5.0
54
$-
43 43
2004 2005 2006 2007
25
2008
2
2009
29
2010
32
2011
1
Groupon, Inc. "Groupon Files Registration Statement for Initial Public Offering," BusinessWire, June 2,
2011<http://www.businesswire.com/news/home/20110602006726/en/Groupon-Files-Registration-Statement-Initial-
Public-Offering>
1
BusinessWire, “Groupon Files Registration Statement for Initial Public Offering,” as cited in GrouBlogOn , June
2, 2011.
<   http://www.groupon.com/blog/cities/groupon-files-registration-statement-for-initial-public-offering/>
2
Das, Anupreeta, and Fowler, Geoffrey A. "Groupon to Gauge Limits of IPO Mania," Wall Street Journal , June 3,
2011.
<   http://online.wsj.com/article/SB10001424052702303745304576361631817311972.html>
3
Barr, Alistair. "Forrester Analyst Questions Groupon IPO Valuation," Reuters, June 8, 2011.
<http://www.reuters.com/article/2011/06/08/us-groupon-valuation-idUSTRE7576UH20110608>
4
Ibid.
5
Etter, Lauren. “Groupon Therapy,” Vanity Fair, August 2011.
<   http://www.vanityfair.com/business/features/2011/08/groupon-201108>
6
Ibid.
7
Groupon, Inc. "Amendment No. 3 to Form S-1 Registration Statement Under the Securities Act of 1933," U.S.
Securities and Exchange Commission, September 23, 2011, p. 8.
<http://sec.gov/Archives/edgar/data/1490281/000104746911008207/a2205238zs-1a.htm>
8
Harris, Melissa. “Groupon shopping itself? Buzz is that the Chicago-based deal site is in talks with Google,”
Chicago Tribune, November 21, 2010.
<   http://articles.chicagotribune.com/2010-11-21/business/ct-biz-1121-confidential-groupon-20101121_1_yahoo-
japan-google-news-yahoo-finance>
21

9
Groupon, Inc. "Amendment No. 3 to Form S-1 Registration Statement Under the Securities Act of 1933," U.S.
Securities and Exchange Commission, September 23, 2011.
<http://sec.gov/Archives/edgar/data/1490281/000104746911008207/a2205238zs-1a.htm>
10
Ibid, pp. 1-8.
11
Ibid, pp. 33-34.
12
Ibid, p. 33.
13
Etter, Lauren. “Groupon Therapy,” Vanity Fair, August 2011.
<   http://www.vanityfair.com/business/features/2011/08/groupon-201108>
14
Groupon, Inc. "Form S-1 Registration Statement Under the Securities Act of 1933," U.S. Securities and Exchange
Commission, June 2, 2011, P.1
< http://sec.gov/Archives/edgar/data/1490281/000104746911005613/a2203913zs-1.htm>
15
Stross, Randall. “Daily Web Deals, but With Daily Laughs,” The New York Times, June 21, 2010.
<   http://www.nytimes.com/2010/06/13/business/13digi.html>
16
Yipit, About Yipit, <http://yipit.com/about/>
17
Boyd, E. B. “Deals Company Valuations Are Plummeting: Report,” FastCompany.com, September 20, 2011.
<http://www.fastcompany.com/1781422/report-deals-company-valuations-are-plummeting>
18
Duryee, Tricia. “Repeat of LivingSocial’s First Offer Two Years Later Tells the Tale of Daily Deals,”
AllThingsD.com
. July 27, 2011.
<http://allthingsd.com/20110727/repeat-of-livingsocials-first-offer-two-years-later-tells-the-tale-of-daily-deals/>
19
“LivingSocial Raises $400M in Funding and Adds to Board of Directors: Local Commerce Expert Accelerates
Market Expansion and Product Innovation,” PR Newswire, April 6, 2011.
<   http://www.prnewswire.com/news-releases/livingsocial-raises-400m-in-funding-and-adds-to-board-of-directors-
119315089.html>
20
MacMillan, Douglas; and Saitto, Serena. “LivingSocial Said to Weigh Funding at $6 Billion Instead of IPO,”
Bloomberg, September 22, 2011.
<   http://www.bloomberg.com/news/2011-09-22/livingsocial-said-to-weigh-funding-at-6-billion-rather-thanpursuing-ipo.html>
21
Barr, Alistair and Oreskovic, Alexei. “UPDATE 2-Facebook ending Deals product after four-month test,”
Reuters, August 26, 2011.
<http://www.reuters.com/article/2011/08/26/facebook-deals-idUSN1E77P1W020110826>
22
Ibid.
23
Etter, Lauren. “Groupon Therapy,” Vanity Fair, August 2011.
<   http://www.vanityfair.com/business/features/2011/08/groupon-201108>
24
Mason, Andrew. “Why Groupon Isn’t in Australia,” Groupon.com/blog, January 4, 2011.
<http://www.groupon.com/blog/cities/why-groupon-isnt-in-australia/>
25
Ibid.
26
Ibid.
22

27
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24