Like a lot of people, I’ve been taken a little aback by the incredible success of Groupon, the deal-a-day site that Google recently offered $6 billion to buy–only to be rejected last week, for pete’s sake. Estimates of annual sales, all thanks to the 50% cut it takes from deals offered daily by local merchants around the U.S., range from $500 million to an almost unbelievable $2 billion (and indeed that is believable only if it’s gross revenues, of which Groupon gets half or less).
For all that, no small number of people have questioned various aspects of Groupon’s business, from wondering if it’s a fad to asking whether merchants ultimately will find the deals profitable enough to continue. A new deal service launching today from Sunnyvale-based startup Offermatic provides some potential answers to those limitations–while raising some questions of its own.
I can’t really offer a better description of Offermatic than the one Mike Arrington at TechCrunch provided last May, when Offermatic began beta testing: It’s the freak love child of Mint (the online finance tracking service now owned by Intuit), Blippy (a service where you post your purchases to the world), and Groupon. So for example, if you spend $75 at Home Depot one month, you might get a $20-off coupon from Lowe’s–deposited automatically in your credit-card account. More details from Offermatic: (more…)