Feeds

25% of Groupon share value WIPED OUT after rates slashed

Voucher bazaar forced to cut fees to lure wary merchants

Reducing security risks from open source software

Groupon lost a quarter of its market value yesterday after it admitted it was taking a smaller cut of revenue on its coupons to keep retailers interested.

The daily deals bazaar's stock dropped 24.78 per cent yesterday to $5.98 after its fourth quarter results were once again a disappointment to investors.

Critics have been concerned that Groupon is having trouble attracting interest from new merchants and retaining existing retail clients to offer its users voucher deals, and these problems appear to have escalated over the past year.

Chief financial officer Jason Child told Reuters that Groupon's results over the holiday period were affected by its decision to give retailers more of the money from their deals to persuade them to sign up to the site or run new offers.

The company ended up with a net loss of $80m for the quarter compared with $60m in the same quarter last year, despite the fact that revenues were up 30 per cent to $638.3m.

Groupon's international business in particular is suffering as it fails to hold vendors' interest in the whole voucher business model.

Merchants have previously complained that Groupon takes too much of a cut from the online deals. The site forecast long-term "take rates" of 30 to 40 per cent during a conference call with analysts.

The daily deals warehouse said part of the reason it had cut its take rate was to get folks onto its latest wheeze, Local Marketplace, which relies on people searching for something to do or buy nearby.

Despite the fact that the Local Marketplace idea is still in its infancy and Groupon Goods, the firm's discounted tat-peddling division, is doing well, the site isn't holding any high hopes for the first quarter this year. It's expecting revenue of between $560m and $610m with the possibility of an operating loss of $10m or a profit of the same, compared to an operating profit in the first quarter of 2012 of $39.6m. ®

Mobile application security vulnerability report

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Nadella: Apps must run on ALL WINDOWS – PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.