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Things that make you go hmmmm: Groupon and Reputation

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Journeyman

This just skittered by in my Google+ feed...where is my robot secretary to keep track of all this stuff?

Time to get serious about GeoSocial

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These guys have studied over 16,000 Groupon deals in 20 US cities between January and July this year. They monitored each deal every ten minutes or so to determine how sales varied over time and also counted the number of Facebook likes that each deal generated.

At the same time, they collected Yelp reviews--some 56,000 of them for 2,332 merchants who ran 2,496 deals--examining how merchant reputations changed before and after a Groupon deal.

These guys use their data to make gain a remarkable insight into the business of daily deals (they also collected data on Living Social). For example, they make a surprisingly accurate estimate of Groupon's weekly revenue per city, which they were able to check against the company's S-1 filing.

But their most controversial finding is that a Groupon deal seems to have an adverse impact on reputation as measured by Yelp ratings. Their analysis shows that while the number of reviews increases signifificantly due to daily deals, average rating scores from reviewers who mention daily deals are about 10% lower than scores of their peers.

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You can download the full article here:  http://arxiv.org/PS_cache/arxiv/pdf/1109/1109.1530v1.pdf

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