Home Groupon Still Growing Ridiculously Fast

Groupon Still Growing Ridiculously Fast

The startup Forbes called the “fastest growing company ever” is still growing fast. August data from Web analytics firm comScore showed Groupon’s unique visitors increased 23% from July to August, meaning it grew the fourth-fastest out of the top 250 largest properties on the Web.

Groupon’s cofounder and 30% owner Eric Lefkofsky also made Forbes’ list of 400 almost-billionaires to watch, with an estimated net worth of $750 million.

Groupon’s concept – one monster discount a day as long as a minimum number of people pledge to buy it – is so drop dead simple that it’s easy to see why it took off. But the simplicity also induces head-scratching. How can investors bet so heavily on a company with such an easily implementable idea? And how did it take until 2008 for someone to think of something so obvious?

I can think of an answer to the second question (Facebook!) but the first is a bit dodgier. There are plenty of Groupon imitators and Groupon, with its 50% cut of sales, has left plenty of room to be beaten on price. Groupon’s had some bad press recently due to fraud and disgruntled customers (see Competitors Seize on Groupon’s Recent Slipups). “There are a million ways we could fail,” CEO Andrew Mason wrote in a comment on TechCrunch.

On the other hand, the $1.35 billion company’s slip-ups were miniscule next to its staggering successes, and it’s possible the hordes of imitators are actually working for Groupon by splitting the rest of the market. Groupon is now the 219th-largest Web property in the U.S., according to comScore.

What do you think – how long can Groupon keep up this rapid growth? Is the company overhyped?

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