Attack of the Groupon Clones!

The wildly popular deal-of-the-day site, which Google has reportedly purchased for $2.5 billion, has spawned countless competitors. So how do they stack up?

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Let's make a deal: Groupon, the popular deal-of-the-day site reportedly purchased by Google, has spawned countless competitors.Copycat businesses help industry evolve -- without them, we'd have one fast food restaurant (White Castle is generally credited as the first). Nobody would have created a national tax preparation service chain after H&R Block opened up shop in 1955. And the only soda conglomerate would be Coca-Cola, which came on the scene in the 1880s (while the first batch of Pepsi wasn't made until 1898).

The latest big hit to inspire copycats (and to gain -- and reject -- a rumored $6 billion buyout offer from Google) is Groupon. A number of websites have surfaced over the past couple years that have similar business models -- although, to be fair, some insist they came up with their idea before Groupon.

Here's how Groupon works: In cities worldwide, consumers sign up and receive a new coupon every day, to use at a local venue -- a restaurant, spa, amusement park, etc. Assuming enough people buy the coupon, the deal stands. In the unlikely event that not enough consumers take the bait, the deal doesn't go through, since these coupon deals have to be done in volume to make a difference for the business offering the discount. For local businesses that participate, Groupon can be a boon, but if they're not careful, they can wind up selling a whole lot of merchandise for a loss.

That's pretty much how most of Groupon's competitors work as well. So just how many of these social sharing coupon website businesses are there? It's dizzying. Here's a closer look:

The site: Deals for Deeds
What it is: So far, Deals for Deeds is just in Washington, D.C., and has pretty much the same model as Groupon. The site features one deal a day with a significant discount, involving businesses in and around the nation's capital. The twist is that 5 percent of what customers pay will go to a charity, and they can choose, among a handful of charities, where their donation should go.

The site:
What it is: Instead of offering one great daily deal, DealRadar showcases "the best offers for more than 80 cities," including Groupon deals, says spokeswoman Lauren Russ, who adds, "You can call us a copycat, or call us efficient." YipIt does the same type of thing, in 18 cities.

The site: Scoop St.
What it is: This site, launched in October 2009, services New York City. As Dave Ambrose, co-founder, explains, "Scoop St. features local business that community members have always wanted to experience, but at a discounted price -- from restaurants to salons and everything in between. We structure unbeatable deals exclusively for the community by using economies of scale and group buying to both promise our vendors profit and foot traffic, as well as enable our local consumers to 'live up their city.'"

The site: Gay List Deals
What it is: As the name indicates, this is a site that highlights gay-owned and/or gay-friendly local businesses. Owner Cooper Smith Koch says he has heard his site referred to as "Groupon for the gays." It just launched, so far focusing on Dallas, and doesn't yet offer deals every day.

The site:
What is is: Like the others, ScoopCoups offers great daily deals, sometimes up to 70 percent off retail, but so far, just in the Hampton Roads, Va., area. The site launched in the spring of 2010.

The site:
What it is: "We're not a copycat," insists founder and CWO (chief waterfowl officer) Mark Gruen. "Rather, we position ourselves as an alternative. We launched 14 months ago, shortly after Groupon had made the transition from being 'ThePoint.' At the time, we had no clue who Groupon -- or ThePoint -- was. Ignorance is bliss." Gruen's business model: Customers pay $2 to get a significant deal on a restaurant, bakery, and other outlet. So you may pay $2 to get a coupon that allows you to pay $15 for a $30 restaurant meal.

The site:
What it is: Launched this fall, this site plans to aim for smaller-based retail merchants in the Atlanta market.

The site:
What it is: Instead of offering one deal from one business, GetGrouby's executives say they are able to offer a number of discounted services from the same business. Launched in May 2010, it services Houston so far but plans to expand to other cities soon.

The site:
What it is: This site also follows the Groupon formula, but is focused on family-friendly deals for the parents of Washington, D.C.

The site:
What it is: Based out of Louisville, Ky., and in the process of expanding to other markets, this daily deal site has been live since July 6.

The site:
What it is: How is this for exhausting? David Sinuk, the founder of Snag and Save, which services the Phoenix market, says he knows of approximately 11 other similar businesses that are starting up or have just started up in Phoenix alone. Similar to Deals for Deeds, Sinuk gives 5 percent of each purchase to charity, having raised more than $6,400 so far for local nonprofits and schools. He says in the seven months he has been operating, he has had some great days (549 deals for an indoor playground facility, for example) and some not so good days (two purchases for a pet photographer service).

The site:
What it is: This site services Seattle, with plans on branching out into eight more cities over the next 18 months.

The site:
What it is: Even AOL Small Business' mother ship, AOL, is wading into the Groupon waters. Wow, which launched earlier this month, provides a daily discount of 50 percent or more for local retailers, restaurants and venues. The folks behind Wow say it's aimed at people with families, tight budgets and busy schedules, which would seem to describe just about anyone with a pulse these days. It currently serves Boston, Philadelphia and Washington, D.C. You can also follow them on Facebook and Twitter.

Our list doesn't even mention LivingSocial, which may be the best-known coupon site next to Groupon. The Washington, D.C.-based site was founded in the summer of 2007, shortly before Groupon came onto the scene.While to date, Groupon is located in far more cities (over 230) than LivingSocial (over 60), the original group buying site doesn't seem to be hurting. Like Groupon, LivingSocial recently scored a major investor: This week, e-tailer giant Amazon invested $175 million in LivingSocial.

"Groupon doesn't pay attention to competitors, because their primary skill is the ability to copy what we do," says Groupon spokeswoman Julie Mossler. "We pioneered the social commerce space and have learned a lot along the way. Growing to serve more than 300 markets and 31 countries has helped us fine-tune every aspect of our business, from our product to customer service to merchant preparation. We frequently hear that the quality of both the merchant and customer Groupon experience are something no other site provides."

Yet, as a result of websites jumping on the Groupon business model, a lot of daily deals are being made between social commerce sites and establishments across the country, generating much-needed revenue for small businesses, creating jobs and helping consumers keep a few more bucks in their wallets.

In that way, Groupon CEO Andrew Mason seems to be spreading a lot of economic good around the world. Of course, helping other entrepreneurs line their pockets probably wasn't what Mason was hoping for, but if Coke and Pepsi, White Castle and McDonald's, H&R Block and Jackson Hewitt Tax Service can co-exist in the same world, so can Groupon, Living Social and who knows how many smaller competitors.

Geoff Williams is a regular contributor to AOL Small Business. He is also the co-author of the book Living Well with Bad Credit.

Tags: best coupons, Business Trends, Groupon, Groupon acquisition, Groupon competitors, Groupon coupons, Groupon deal, Groupon deal of the day, Groupon Google, Living Social, unique business ideas

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