Groupon.com: Internet Fairy Tale or the Next Fabulous Flameout?

Sept. 20, 2010— -- On a recent summer day at Chicago's "Kid's Table," manager Anastasia LaBorde found her business inundated with phone calls.

On a typical day at the store, which hosts children's cooking classes, LaBorde receives a handful of calls from curious would-be patrons and clients. But on this day, by midafternoon, she'd received more than 100 calls.

"I can't answer the phones enough," she said, laughing. "By the time I end one phone call, I get another one."

The barrage of new interest in the cooking school came after the Kids Table was featured on the sizzling-hot website Groupon.com. Groupon, a Chicago Internet startup, offers one heavily discounted online deal every day to customers around the globe.

"Every single phone call today has been a Groupon pretty much,'' said LaBorde. "We have only been open for about 3½ years now, so we haven't done too much advertising, and this is the best possible way to go about it. [It's] completely free, and everybody's signed up for Groupon, so it's been great."

By the end of the day, when the Kids Table was showcased on Groupon, the cooking school had sold 3,470 deals through the Groupon site, which offered a class for $12, a steep discount from the regular $25 price. LaBorde said the discount would turn the deal seekers into loyal customers. "We rarely have people who come in once here and don't come back, so I'm sure we're going to have lots more people coming in now."

Not even two years old, Groupon.com, at this stage of its business development, is growing faster than Facebook, Amazon and Google, in terms of total revenue.

With its high-tech twist on an old medium, discount coupons, tweaked for the Twitter set, Groupon has more than 11 million active subscribers and has saved clients more than $488 million, according to the company.