Groupon reported this week that its revenue jumped by 89 percent since last year, a better-than-expected result that surprised investors and sent the daily-deals site's share price climbing by 16 percent. Groupon's stock had been declining ever since it launched its IPO in November, as investors soured on the company's poor earnings results and shady accounting corrections. Groupon was subsequently held up as the poster child for a burgeoning tech bubble, as over-exuberant investors had valued the company at close to $18 billion on its IPO — a figure that soon fell as low as $6 billion, though it's since clambered back to $8 billion. Is Groupon about to come roaring back?
Yes. Groupon is improving its business model: Groupon not only bulked up on revenue and expanded its customer base — it also brought down its marketing costs, says Rolfe Winkler at The Wall Street Journal. The company's harshest critics have "argued that its business model would collapse when it dialed down marketing expenses," saying the site was too dependent on advertising "to promote its daily deals." But now it looks like Groupon can grow and spend less.
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