Feeds

25% of Groupon share value WIPED OUT after rates slashed

Voucher bazaar forced to cut fees to lure wary merchants

Security for virtualized datacentres

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. ®

Security for virtualized datacentres

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Show us your Five-Eyes SECRETS says Privacy International
Refusal to disclose GCHQ canteen menus and prices triggers Euro Human Rights Court action
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.