percent said the Groupon offer was less effective than other types of marketing.
I've always maintained that this is a hype driven business built on an unsustainable business model both for the merchants and for Groupon, said Rakesh Agrawal, principal analyst at reDesign mobile, a San Francisco consulting firm.
Existing customers interested in signing up for daily deals has waned – Groupon reported last week that the average revenue per active customer (defined as an account that has purchased a deal from the site in the previous 12 months) fell to $63.96 in the 12 months to Sept. 30 from $76.49 a year earlier.
The company has also suffered a string of high-level executive departures as its market value has shriveled to just $1.8 billion, down from nearly $13 billion when it went public. Groupon has also been dogged by controversy over its accounting methods, though it said last week that it had $1.2 billion in cash and cash-equivalents with no long-term debt.
BEYOND THE DAILY DEAL
Groupon cites an array of new services and features that it hopes will make the company a crucial partner for many types of merchants over the long run.
Groupon Goods, a more traditional discount online retail operation, already accounts for much of the company's revenue growth.
We're investing in the development of products and technology that help our merchants run their businesses more effectively, from payments and POS services to our evolving suite of marketing services including the daily deal, said Kal Raman, Groupon's senior vice president of international operations, in an email.
By this combination we become a true merchant partner, serving the yin and the yang, both the operational and marketing pieces of each business.
A key part of that is the massive sales force that Groupon has built to market its daily deals to small businesses. The relationships it has built with merchants and a retail subscriber base that recently hit 200 million could help it beat back competition in daily deals and broaden its offerings, some analysts say.
Groupon controls about 50 percent of the daily deals market share