The upside is SMB's can acquire hundreds of clients in one 24 hour period, giving away huge discounts and paying nothing up front to be seen by the masses. The downside is they are often ill prepared for the gigantic influx of consumers on their business, many of whom will never come back again.
DealOn is similar but different. ReachLocal acquired DealOn in Feburary 2011 and recently renamed them ReachDeals. ReachDeals works with SMB's to bring their offer to many different publishers over a longer period of time. This allows a steady stream of customers over time to the business and a flow that is much more manageable.
Is group buying a fad or a business model for decades to come? We will find out eventually but give that everybody loves a deal, I am sure they will be around for a long time in some shape or form.
About Alan Moore: Alan is an Internet Marketing Consultant with ReachLocal Baltimore. His mission is to help you increase your revenues and decrease unproductive advertising expenses through proven, online marketing strategies. He manages over $1,000,000 in yearly marketing budgets and has worked with local businesses, agencies and the US government. Give him a call at (877)655-3438 to schedule a free consultation.