Over the past week, two companies have abandoned the “daily deal” market, pricking holes in what many observers are calling an unsustainable bubble. Both Yelp and Facebook have decided to opt out of the market populated by companies like Groupon and LivingSocial. According to surveys, consumers feel overwhelmed by the glut of daily offers filling their inbox—discounts on everything from three-course dinners to auto detailing. Even the big dogs of the industry are losing steam: In July, Groupon and LivingSocial sustained traffic declines of almost 9 percent and almost 30 percent, respectively. Are daily deals doomed?
It might be too early to draw conclusions, but research by