The deal-a-day industry is an interesting phenomenon because you have companies that are internationally famous whose fame doesn't really bring any added value to businesses because their customers are local. I think Groupon would work far better for ecommerce sites because there you aren't limited to local customers, and would be willing to pay more for instant nationwide exposure. And because the audience would be enormous, they could command much larger margins and stave off competition from local sites eating up their business. Of course Groupon scaled up way too fast and is now heavily reliant on volume that only selling to a huge number of businesses can bring.

Assuming Groupon is in financial peril, if I were CEO I would think about canceling the IPO, laying off most of the employees, and switching to ecommerce deals. No matter how you slice it, brick-and-mortar deals is a losing business model for a business after a certain scale.