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Wednesday, May 18, 2011

Consolidation Takes Hold in Deal-a-Day Coupon Biz

Posted By on Wed, May 18, 2011 at 4:14 PM

click to enlarge Nobody can touch Groupon, but smaller companies are being swallowed up. - MYCODETRIP.COM
  • mycodetrip.com
  • Nobody can touch Groupon, but smaller companies are being swallowed up.

Three Knocks, who's there? Nobody, according to the company's website. After barely seven months, this Emeryville-based Groupon-type business has bowed out.

Groupon-style promotions have been controversial for many restaurants who see them as little more than an exercise in giving away free meals, resulting in a decline of dining offers. By contrast, owners of service-based businesses rave about coupons' benefits, though on the customer side, a handful of horror stories has tarnished the industry.

That's no longer a concern for Three Knocks, Inc. CEO and founder Taylor Wang, who gets to cash out from GroopSwoop, which he founded in 2009 (New York-based BuyWithMe acquired the GroopSwoop domain last month). Online daily-deal promotion companies are going through a period of consolidation, as big players with deep pockets are acquiring smaller regional competitors. Chicago-based Groupon leads the pack by far, followed by Washington D.C.-based LivingSocial.

Here in San Francisco, TownHog, Bloomspot, HomeRun, and PinchIt, are still hanging on. Atlanta-based ScoutMob's no-money-upfront-style is gaining many local fans, while New York-based GiltCity and L.A. newcomer BlackboardEats are looking for a niche touting exclusive, members-only promotions.

Overwhelmed? Use an aggregator site like Yipit, which tracks these and other offers.

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Luis Chong

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