Groupon is adding 150 employees a month at its U.S. headquarters and trains them in a church because the conference rooms at its headquarters aren`t big enough. Ideeli has crammed so much electronic equipment into its New York office that the power goes out every day.
And at LivingSocial, well, the living is a little too social. Its third office in Washington, open just two months, ran out of room so fast that employees have to work at narrow desks in the hallway.
Deal-a-day Web sites blast email offers for deep discounts, sometimes good for only a few hours. And they`re becoming so popular that their offices are starting to look as crowded as their subscribers` inboxes.
In just three years, the business model has changed local advertising, delivering faster results than other marketing methods. Store owners get immediate revenue and can see exactly how many customers an offer brings in.
The exponential growth of the sites, along with the emergence of hundreds of clones, is reminiscent of tech companies before the dot-com stock bubble burst in 2000. But Lou Kerner, a social media analyst at Wedbush, argues this isn`t a fad: It`s a new category of commerce that has changed how companies from hair salons to sandwich shops market their products.
Groupon, the No. 1 daily-deal site, has swelled from 2 million subscribers to 85 million over the past year and a half, while second-place LivingSocial went from 120,000 subscribers to 28 million.
The sites are expected to generate $2.7 billion in revenue this year, more than doubling from last year, according to Local Offer Network, which collects and distributes deals from hundreds of sites. The daily-deal market could reach $4 billion by 2015, says Mark Fratrik, vice president at marketing research firm BIA/Kelsey. While that`s a small slice of the $142 billion in online...
Deal Sites Lure Shoppers and Businesses Alike
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