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Big Deal.

Are investors gearing up for Groupon remorse?

Scott OlsonŚGetty Images

Groupon

Groupon's impressive $700 million IPO on Nov. 3--the largest tech IPO since Google's--certainly left investors smiling. But the daily-deal giant has yet to prove that its business model works for vendors and customers.

Groupon's model is a mixed bag for businesses. More than one-quarter of vendors offering a daily deal lose money on the venture, a Rice University study found, and another 18% merely break even. Even when a deal helps a vendor's bottom line, it may end up hurting its reputation. A study analyzing customer ratings at Yelp.com found that reviews mentioning "Groupon" or "coupon" rated their experience...

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