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Tuesday, October 18, 2011

Groupon undercounting number of times a deal is purchased

Oct. 10--Groupon has stopped displaying the exact number of daily deal vouchers purchased on its website, a move the Chicago-based company said was to foil outside attempts to estimate its total sales.
In the past, each Groupon Web page for an individual deal would show how many coupons had been sold. The new format now says "over" a certain number has been sold. For example, Chicago's featured deal on Monday for Lakeview ice cream parlor Bobtail says "over 1,800 bought."
Groupon spokeswoman Julie Mossler posted an explanation of the changes on the company's official blog and said the intention was to make it "clearly impossible to predict our sales." The new format should be rolled out site-wide within a few weeks, she said.
"As customers, we like the counter because it indicates how popular deals are," Mossler wrote. "But some clever people are using the counter to make (consistently in correct) estimates of our total company sales, which we don't like for the same reason you probably wouldn't like if people tried to guess your weight all day."
The change to the counter underscores Groupon's sensitivity to the constant scrutiny it has endured since filing for an initial public offering in June. Financial analysts, bloggers and other pundits have picked apart the company's financial statements and raised concerns about the viability of Groupon's business model. The company has amended its IPO documents several times, with one of those revisions containing a major restatement of revenue.
Because of "quiet period" regulations ahead of its IPO, Groupon is limited in how it can respond to criticism. But the company's irritation has surfaced in other ways. In an internal memo that was leaked to the press in August, Chief Executive Andrew Mason said he had recently read an article that made him realize "the degree to which we're getting the ***--kicked out of us in the press had finally crossed the threshold from 'annoying' to 'hilarious.'"

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