Groupon's quarterly results show slowing sales growth

The daily deal web site, once dubbed the "fastest growing company ever" by Forbes, saw its pace of sales growth slow in the second quarter.

August 10, 2011

By Ashley Gross

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The daily deal web site Groupon says its sales continued growing in the second quarter, but the rate of growth has slowed.

People have been closely watching Groupon’s financial results as the company gets ready to sell shares to the public. Groupon said second-quarter sales grew 36 percent from the first quarter. That sounds good, but the difference is that last year, sales were doubling every quarter.

And Internet analyst Greg Sterling says he’s concerned the company is spending too much on marketing.

"The biggest worry is the cost of customer acquisition," Sterling said. "They have to keep spending money, lots and lots of money to market themselves."

Groupon says its second-quarter loss was about the same as in the first quarter – showing that it spent less money on marketing. But Sterling says, especially with the recent volatility on Wall Street, investors will probably be a little more leery of Groupon’s IPO.