What IS the deal?

Groupon is debatably one of the fastest-growing campaigns.

However, recent doubts about their IPO, along with rising marketing costs, traffic decline, executive partings, and a lawsuit filed against the company by its own sales reps have people questioning whether Groupon may be showing signs of deterioration.

When coupled with a sudden exit of two major social-media brands from the deals arena hasn't helped either. Facebook and Yelp both set out to create "Groupon killers" but recently scrapped their efforts. Today, with 600 Groupon-style clones diluting the market, consumers are showing signs of frustration, with Web coupons choking their in-boxes.

And yet, despite all of this, there's still evidence that the daily deals and group-buying sector is still a player. Nearly three years old, the market is estimated to reach $6 billion by 2015, Epic consumer brands like Amazon, Google, AT&T, and a host of other companies are diving in deep and investing heavily too. There have also been a spate of acquisitions, and to date, $2 billion of private equity has been infused into daily-deal type companies, according to analyst Peter Krasilovsky, a vice president at BIA/Kelsey. Daily deals are a "fast evolving" marketing platform that will remain "an important part of the way that small businesses and national advertisers will promote themselves," he told CNET.

The 'Groupon' phenomenon
 daily deals are simple. Every day Groupon issues a discounted product or service via a digital coupon sent by e-mail, and if a certain number of people prepay for the deal, it triggers a savings. Groupon takes a cut of every deal sold. Consumers in domestic and overseas markets have been flocking to these group coupons--"Groupon"--for the obvious reason: everyone loves a deal. Indeed, digital coupons on everything from wine tastings to hang-gliding lessons to spa treatments have permeated our culture in a big way. Josh Stevens, 28, demonstrated this when he sustained his living expenses on Groupon deals for an entire year.  No cash exchanged whatsoever.

Groupon provides metrics and can now track exactly how many customers bought the e-mail promo.  With 115 million subscribers and an estimated $20 billion valuation, Groupon is just one U.S. digital dealmaker among a cacophony of clones.

Lastly, industry insiders expect Facebook to stay in the game, despite recent media reports.  "I don't think anyone thinks they're going away," one source familiar with the daily-deals market told CNET. "This business requires reaching hundreds of thousands of merchants. It's a very competitive space from a sales perspective. Facebook was just nibbling around the edges at this. They didn't have a clear strategy." Apparently, Facebook doesn't have the "feet on the street" to pull off a group promotions and social buying program at scale. The company described its four-month deals efforts as a "test" and went at it with only a limited number of partners signed. But with Facebook Credits, Places, and check-in deals still in place, the company could easily surprise with its next deals move.

Sure, Groupon and its CEO might seem flawed, loud, and messy in the way they go about business, but they deserve credit for ushering in today's crush of digital discounts, and linking small and local businesses, most of which still operate offline, with online consumers.

Going forward, it's anyone's guess as to which daily-deals companies will have staying power. But when all is said and done, consumers are getting deep discounts on products, services, and the like delivered right to their in-boxes. And "merchants are saying it's a good model," according to Andrew Weinstein, Living Social's communications director. "If it works for the businesses and the consumers, then it works for us."

At the end of the day, doesn’t everyone just want a good deal?