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(Updates with comments by CEO in the second paragraph.)
June 7 (Bloomberg) -- Groupon Inc., owner of the world’s largest online coupon site, said it welcomes entry by Facebook Inc. and Google Inc. into the market, as surging sales attract more companies to the business, intensifying competition.
“To some extent, they’re competitors,” Groupon Chief Executive Officer Andrew Mason said at a briefing in Seoul. “That said, we welcome competition. We think it’s good for consumers, it’s good for merchants. We hope to see them bring innovation to the market. We welcome them to this space.”
The daily deals market, which Groupon pioneered, is set to generate $3.9 billion in sales in 2015, surging from $873 million in 2010, according to researcher BIA/Kelsey in Chantilly, Virginia. Groupon still had a $113.9-million net loss in the first quarter as intensifying competition led marketing expenses to eat into profit margins.
Facebook, the world’s biggest social-networking website, unveiled a Groupon-like feature that lets merchants offer discounts to potential shoppers nearby. Google introduced a similar service offering discount deals, named Google Offers, last month.
Co-founded by Mason in 2008, Groupon sells discount deals for goods and services ranging from restaurants to nail salons in more than 500 markets worldwide, compared with about 260 for its closest rival Washington-based LivingSocial. The companies offer daily discounts of as much as 90 percent and keep about half the revenue, giving the rest to merchants.
Groupon filed for an initial public offering on June 2 with the help of Morgan Stanley, Goldman Sachs Group Inc. and Credit Suisse Group AG.
The online coupon provider, which had an implied valuation of $5.6 billion at the end of March according to research firm Nyppex LLC, was in talks with bankers about an IPO that would value the company at as much as $25 billion, people familiar with the matter said in March.
Groupon plans to expand its Groupon Now service, which was released in May and lets smartphone users search for deals at nearby locations globally, if testing in the U.S. goes well, Mason said. The company may expand into more overseas markets, with no decision made yet, he said.
--Editors: Suresh Seshadri, Chua Kong Ho
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