Is it the case the group buying model is inherently flawed as a business, or did Groupon screw it up just because they didn't execute properly and over-expanded? (assuming they did screw up, based on the recent reports analyzing their finances.)
In other words, what are the chances that other group buying sites will go downhill as will?
Groupon picked the low hanging fruit already without consideration to their existing customers. I haven't heard a single compliment from my business-owning friends about working with groupon, and almost all of them now refuse to work with any daily deals site. So now they are pushing for other businesses which are much more expensive to find and woo.
The model itself is broken: the most successful places have no need to run a daily deal. The failing businesses have real incentive, but there's probably a good reason why they are failing in the first place (and some of my friends have noticed strange service irregularities -- recall the FTD issue earlier this year). Finally, New businesses are inadvertently hurting themselves. When you give out a free sample, people don't expect an item to be free. When you give a daily deal, everyone (not just the participants) mentally shift their price expectations, and it's hard to raise the price again without alienating both the daily deal followers and true customers.
What will win is a group buying program where people can come together and order a service (such as minibuses or family-style restaurants).
In other words, what are the chances that other group buying sites will go downhill as will?