I will join you from the other angle. Hat off to Mr. Mason for a genius idea, but in the wildest dream I wouldnt come up with a business where you ask a store to cut their price 50% and share 50% of the remaining 50% with me just for announcing your deal. when this just came in public light, to me it felt like an insult: I thought no way a store will lose money on each merchandise sold because there are not in charity business and to me it was simply an insult that before that deal they tried to rip me off with jacking up the price 150% (since they would still make money after the discount and 50% to Groupon).

Whether the 50% lines work for people is on a case by case basis, and you're certainly not alone in thinking there are some serious problems with it.

However, if you think of it another way, Groupon is marketing. Sure, using Groupon costs them money, but so does typical marketing, whether it's a clever PR campaign, or a TV advert, or a spot in the local newspaper... The real question is always going to be whether the results Groupon delivers you are worth the cost of the campaign, and how that compares to alternative forms of marketing.