In May Groupon moved 19,822 tickets in eight hours and split the $238,000 with the tour operator. The most popular item so far: a $25 ticket for a Chicago architectural boat tour sold for $12. The campaign brought in $120,000 at virtually no marginal cost to the exhibit Groupon pocketed about 50% for a day's effort.
In May Groupon sold 6,561 tickets to a King Tut exhibit in New York's Times Square for $18 apiece, little more than half the list price. Mason's model is transforming the way companies-especially smaller ones with limited marketing budgets-snag sales. Groupon broke into the black just seven months after inception. (Mason will not disclose his stake, which he says is less than 50%.) The only company to reach a $1 billion valuation faster was YouTube (now part of Google), founded in 2005 and still waiting to turn its first profit. At just 17 months old this April Groupon boasted a $1.35 billion valuation when it raised $135 million, the biggest chunk of it from Digital Sky Technologies, the curious Moscow investment fund behind Facebook and Zynga. , AOL and Google-grew that big that fast. Put together to win some underwriting business. Occupying 85,000 square feet inside a rehabbed eight-story former Montgomery Ward warehouse in Chicago's River North neighborhood, the company is on track to pass $500 million in revenue this year, according to a report Unlike so many dot-com rockets, Groupon is a real business. Groupon gets its offers in front of eyeballs by buying ad space throughĪnd Facebook and via the word of mouth of its 13 million subscribers. But it now has customers who might never have thought of patronizing the business. Since the resulting revenue is not only discounted but shared (typically, 50/50) with Groupon, the vendor may scarcely break even on the incremental sales. What's in it for the vendor-which might be a museum, a yoga studio or an ice cream shop? Exposure. It's a cents-off coupon married to a Friday-after-Thanksgiving shopping frenzy. That's a familiar come-on, but it's coupled with a novel element: You get the deal only if a certain number of fellow citizens buy the same thing on the same day. Act now, says the pitch: You have only so many hours before this offer expires. Groupon, a name that blends "group" and "coupon," presents an online audience with deep discounts on a product or service.
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