Social coupon sharing site, Groupon, has now joined the exclusive billion dollar club with the likes of Facebook and Twitter. This is a remarkable feat considering that Groupon only caters to 54 cities in the U.S., which pales in comparison to the global reach of the other two social networking behemoths. And, to really appreciate this billion dollar number remember that the much publicized geo-location service, Foursquare, is valued at a mere $80 million.
According to statistics from Compete.com, Groupon’s site traffic has more than quadrupled over the past year. What Groupon has going for themselves is the ability to directly tie-in a simple, but genius business model. When consumers decide to participate in the deals posted on their site Groupon receives a cut of the profits, which some have suggested is as high as 30% of the overall revenue generated by participating vendors. This is a great chunk of change and a practice that future online start-ups should try to emulate.
