2012 Tech Predictions: A Look Back

Daily Deal Sites Go Bust

Prediction:

Daily deal sites such as Groupon (GRPN), Living Social, Google Offers, Amazon Daily Deals, and a host of other sites gained traction in 2011. Groupon was the first to go public, raising $700 million in its initial public offering.

The deal was met with some skepticism, however, as analysts wondered about slowing revenue growth at the company, and its "economic moat," which refers to its ability to stop others from entering the space.

With a host of new daily deal sites popping up all the time, one of these major players could end up on the rocks.

Review:

This one I got mostly correct, with Groupon experiencing tremendous difficulties in the daily deals space. The company has transitioned itself from relying only on daily deals, and now appears to be more of an e-commerce company, selling actual goods.

Living Social recently laid off 400 employees, as it struggles with the daily deals space. Also not boding well for the sector was Amazon's (AMZN) massive writedown on its investment in Living Social. The Seattle-based online retailer wrote down $169 million of its $175 million investment.

Grade: A- (Groupon's shares have lost 78.95% year-to-date as investors worry about the company. Amazon wrote down nearly 100% of its investment in Living Social. Google Offers never really took, and Amazon has had limited success with its own daily deals. Chalk this one up in the win column).

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