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Why Groupon's IPO Isn't Like Amazon's

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Why Groupon's IPO Isn't Like Amazon's

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Barring any unforeseen delays or takesies-backsies, Groupon's IPO is slated for Thursday. That being less than 24 hours away, there's a slew of heated criticism coming out about the stock offering. From both sides.

According to Bloomberg, some investors are feeling far from confident and take issue even with Groupon's assertion that it's comparable to Amazon before its IPO in 1997. True, both companies waited about three years before going public, but analysts say Amazon was far better prepared -- and in far better shape -- before its IPO. One analyst Bloomberg spoke with pointed out that Groupon is generating lower revenue per employee and is spending more of its sales on marketing than Amazon was. Which is truly saying something, given Amazon's popularity today, since the Internet and shopping on it before Y2K was seen both as a novelty and something of a punchline.

Meanwhile, there's further speculation that Groupon's IPO and its overall ubiquity might force deeper Black Friday discounts. As mentioned previously, the rise of the Internet has not only forced many companies to go online, but consumers as well: Remember when the Saturday after Thanksgiving wasn't referred to as "Cyber Saturday?"

The ritual of camping out overnight and risk trampling at a popular big-box store is seeming increasingly stupid over the last few years, but it might indeed be more viable if sites like Groupon force retailers' hands to shove prices even lower. PC Mag cleverly predicts that since Groupon has recently rolled out initiatives with high-end deals (Groupon Reserve), discounts on electronics (Groupon Goods), and a loyalty program (Groupon Rewards), those could all add up to something stores can't risk ignoring if it wants to stay in the black. After all, traditionally, it's a weekend where most companies turn their biggest profits.

All in all, this might be the year to truly spoil yourself: Why not pick up that Battlestar box set and the commemorative version of Click you've been eyeing? If Groupon crashes and burns, who knows if it'll be able to hang in for another entire year to force such competition?

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