Groupon pulls in $11 million with Gap voucher

By Wailin Wong
Posted Aug. 20, 2010 at 10:09 a.m.

Daily deal site Groupon reported Friday that it sold 445,000 vouchers for retailer Gap, bringing in $11 million in revenue for the Chicago-based company’s first-ever nationwide promotion.

Groupon typically splits revenue down the middle with its participating merchants. The company declined to disclose how it divided the $11 million from Thursday’s sale. The coupon offered $50 in Gap merchandise for $25, and demand was so high that Groupon’s servers experienced technical difficulties on Thursday morning.

Consumers who were having trouble accessing the Web site were directed to an apology page that let them enter their e-mails so they could be contacted when the traffic issues were resolved. Groupon spokeswoman Julie Mossler said the site was running smoothly again by roughly 10 a.m. Chicago time on Thursday, with 10 vouchers being sold per second throughout the day.

The Gap promotion marked a departure from Groupon’s typical model, which is to offer a discount to a local business. The company’s model has been evolving as it grows from Chicago start-up to national phenomenon, with founder and Chief Executive Andrew Mason netting a cover story in the latest issue of Forbes and appearing on NBC’s Today Show. Groupon recently introduced a feature called personalized deals that targets subscribers based on their gender and zip code, allowing the site to offer multiple promotions each day. These deals will eventually be aimed at consumers based on their Groupon buying history, similar to how e-commerce companies such as Amazon use recommendation technology to predict shoppers’ preferences.

Groupon also said this week that it has acquired two daily deal sites in Japan and Russia, expanding its international reach.

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