The Yipit Data Report -- DRAFT

Daily Deal Trends in North America

August 2011

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METHODOLOGY Yipit is a Daily Deal aggregator and has structured over 300,000 offers from over 600 sites since early 2010. The analysis in this report is derived from the 31,648 Daily Deal offers tracked by Yipit in the month of August 2011 in North America. The analysis does not contain information related to mobile-based Groupon Now! or LivingSocial Instant deals. These deals represent a relatively small fraction of overall revenue for these companies. For additional detail on mobile-based deals, please contact the Yipit Data team at data@yipit.com.

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MARKET GROWTH The North American Daily Deal industry resumed growth in August following its decline in July. Both the number of deals offered and total industry revenue grew by 9% from July. The Daily Deal industry resumed growth with the number of Daily Deals, recorded revenue and number of competitors increasing from July. Number of deals offered increased 9% to 31,646 from 29,020 in July. Total revenue increased by 9% to an estimated $228 million from an estimated $209 million in July.

LEADERBOARD

Groupon generated double-digit revenue growth in August while LivingSocial experienced declining revenue for the second consecutive month. Groupons revenue increased by 13% to $120.7 million from $106.6 million in July. Groupons growth was driven by a 10% increase in the number of vouchers sold per deal and a 5% increase in the average voucher price. These two factors offset the slight decline in the number of deals that Groupon ran during the month. Groupon benefited from the first full month of Groupons travel deals product, Groupon Getaways, which launched in mid-July. Groupon Getaways accounted for
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$9.6 million of gross revenue in August compared to $5.7 million in July. This $3.9 million of incremental revenue represented 27% of Groupons overall revenue increase for the month. LivingSocials revenue declined 3% to $45.1 million from $46.4 million in July. LivingSocials revenue decline was driven by a 6% decrease in the number of vouchers sold per deal and a 1% decrease in the average voucher price. These decreases were only partially offset by a 4% increase in the number of deals that LivingSocial ran during the month.

Groupons market share increased to 53% in August from 51% in July. LivingSocials market share declined to 20% August from 22% in July. LivingSocial had gained market share from Groupon throughout the first half of 2011, however Groupon has gained market share each of the last two months. Groupon and LivingSocial accounted for 65% and 24% of recorded revenue in August, compared to 62% and 27% in July. Based on merchant polling, third party traffic reports, deal frequency and Yipit conversations with industry, we estimate that approximately 18% of industry revenue comes from sites from which we do not record revenue metrics. Overall, we estimate that Groupons overall market share is 53% while LivingSocials estimated market share is 20%.

Four-way race for third place between BuyWithMe, Gilt City, Travelzoo and Bloomspot. BuyWithMe, Gilt City, Travelzoo and Bloomspot are the four largest competitors to Groupon and LivingSocial that have gained nationwide scale. BuyWithMe, Gilt City and Bloomspot do not disclose purchase counts, and therefore their exact revenue performance cannot be determined. However, based on merchant polling, third party traffic reports, deal frequency and conversations with industry insiders, Yipit believes that these three competitors are vying for the #3 spot with Travelzoo.

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GROUPON GETAWAYS OVERTAKES LIVINGSOCIAL ESCAPES IN FIRST FULL MONTH August was the first full month of operation for Groupons new travel deals product, Groupon Getaways, which launched in mid-July. Groupon Getaways is a partnership between Groupon and Expedia. The product is a direct competitor of LivingSocial Escapes, LivingSocials travel deals product that has seen considerable success since its launch in November 2010. Groupon Getaways generated $9.6 million of revenue in August, 42% more than LivingSocial Escapes $6.7 million of revenue. Groupon Getaways outperformed despite offering 20% fewer deals than LivingSocial Escapes. Groupon Getaways deals averaged $86,983 of revenue per deal, 78% higher than the $48,804 average revenue from LivingSocial Escapes deals. Groupon Getaways deals featured slightly lower price points than LivingSocial Escapes deals but Groupon Getaways sold more than twice as many vouchers per deal. Revenue from Groupon Getaways increased 67% from July. However, since Groupon Getaways was only active for the last two weeks of July, run-rate revenue from the product decreased 19% in August. This decrease was primarily due to a 36% decrease in the number of vouchers sold per deal, partially offset by a 27% increase in the average price per voucher. Revenue from LivingSocial Escapes declined 2% from July despite a 48% increase in the number of deals offered. The decreased revenue per deal was driven by a 27% decline in the average price per voucher and a 9% decline in the number of vouchers sold per deal. Groupon Getaways represented 8% of Groupons North American revenue in August while LivingSocial Escapes represented 15% of LivingSocials North American revenue in August. Overall, travel deals represented over 10% of overall Daily Deal industry revenue in North America for the month.

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CATEGORIES

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As noted above, we estimate that approximately 18% of industry revenue comes from sites from which we do not record revenue metrics.

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PRICING

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INQUIRIES Yipit Reports Monthly Industry Reports are available each at http://yipit.com/data Licensing Yipit Data Yipit provides raw Daily Deal industry data to leading Daily Deal sites, institutional investors and other industry participants. Yipits data offerings include comprehensive domestic and international coverage of the industrys largest players (Groupon, LivingSocial, Google, etc.). Yipits deal-by-deal data includes full performance metrics including merchant contact information, price, number of vouchers sold and gross revenue. Please visit http://yipit.com/data and direct inquires to data@yipit.com Press Researching Daily Deals We provide research and commentary on Daily Deal trends and events to major media outlets including The New York Times, USA Today, The Wall Street Journal, TechCrunch, Harvard Business School, INSEAD and more. For inquiries, email press@yipit.com

ABOUT YIPIT Yipit (http://yipit.com) aggregates and recommends the best Daily Deals based on where you are and what you like. We currently collect Daily Deals from over 400 services including Groupon, LivingSocial, BuyWithMe, Tippr, Yelp and many more. Yipit also provides past offer data and competitive analytics to the Daily Deal and Investor communities. Please visit http://yipit.com/data and direct inquires to data@yipit.com

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DISCLAIMER All material contained in this report is the property of Yipit, Inc. (Yipit) unless otherwise indicated. This report is proprietary, confidential and provided for the exclusive use of the recipient. No portion may be directly or indirectly copied, published, reproduced, modified, displayed, sold, transmitted, or redistributed in any medium without the express prior written consent of Yipit. Any unauthorized use of the content of this report is strictly prohibited. This report is intended for informational purposes only. Yipit provides the information and data contained herein on an as is, as available basis, without representations or warranties of any kind whatsoever, expressed or implied. The information in this report may be incomplete and may not contain all material information relating to the subject matter of the report. Yipit does not provide any information or make any representation or warranty on behalf of the companies that are the subject of this report and this report has not been authorized or approved by said companies. This report reflects the results of our research as of the date of this report. Our research results are subject to change at any time as new or additional data and information is received and analyzed. Yipit undertakes no duty to update this report, or to provide supplemental information to any client receiving this report, absent a specific arrangement to the contrary between Yipit and individual clients, which arrangement may specify different frequency and depth of analysis and update commitments based on levels of service and fees selected by clients. This report is provided solely to clients of Yipit, each of whom assume all risk and liability with regard to any use or application of the data included herein. In no event shall Yipit or its officers, directors, affiliates, shareholders or employees be liable for any damages that are directly or indirectly related to this report.

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