The new competition is a boon to merchants, who will now have multiple channels for reaching out to customers with shopping incentives. It's ultimately bad for Groupon and all of its copycats because they'll end up copying each other's "services" to seek differentiation. That means they'll end up competing on price, because there's no way they can build brand loyalty without an emotional component in their customer service. That emotional hook is how all of those worthless Wall Street wealth management firms survive despite the universal similarity of their product lines.
Here's a prediction. The IPOs of these online coupon aggregators will tempt larger online megaportals like Yahoo and Google to buy them out at unwarranted premiums just to get a "presence" in this "space." You have to love the lingo these kids use nowadays. The whole trend will turn out the way GeoCities did for Yahoo. Remember GeoCities? I sure do, because I built my first website there in 1998. It cost me nothing, and that's ultimately what GeoCities' business model was worth. Nothing. Yahoo bought GeoCities for $3.57B in 1999 and shut it down ten years later. The same fate awaits most of these online enablers of merchant gizmos. The founders will do quite well; hence the scramble for media attention at this stage.
People desparate to make a quick buck will line up to buy hot Web stocks. Just a few headlines in investment magazines targeting the harried middle class will do the trick every time. Mutual fund managers chase the same hot trends. Nothing has changed since the dot-com era.