8/29/2011

Facebook surprised analysts on Friday by pulling the plug on its 4-month-old Deals social-commerce project. The move gives Groupon a little more breathing space, but could underscore concerns about the sustainability of the daily-deals site's business model. "The Groupon group-buying phenomenon is a commodity. There are no barriers to entry. It's just not going to work because everybody offers it and therefore the margins go down," argues Jeremiah Owyang of Altimeter Group.

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