SecProbe.io

August 19, 2011
 Via Email

Andrew D. Mason Chief Executive Officer Groupon, Inc. 600 West Chicago Avenue, Suite 620 Chicago, Illinois 60654
Re: Groupon, Inc.
Amendment No. 2 to Form S-1 Filed August 10, 2011
  File No. 333-174661

Dear Mr. Mason:

We have reviewed your registration statem ent and have the following comments.  In
some of our comments, we may ask you to provi de us with information so we may better
understand your disclosure.
 Please respond to this letter by amending your registration statement and providing the
requested information.  If you do not believe  our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
 After reviewing any amendment to your re gistration statement and the information you
provide in response to these comments, we may have additional comments.
 Prospectus Summary, page 1

 1. We note your response to comment one from our letter dated July 22, 2011 and the
revised disclosure in the thir d bullet point on this page regarding re peat customers.  We
also note your other operating metrics on page 8.  To the extent feasible, please add a row
showing your repeat cumulative custom ers for the periods presented.
 Letter from Andrew D. Mason, page 31

 2. We note that you have retained the reference to adjusted consolidated segment operating
income in the penultimate paragraph on page  32.  Supplementally, please clarify for us
the statement that subscriber acquisition costs will “end when this period of rapid
expansion in our subscriber base concludes and we determ ine that the returns on such
investment are no longer attractive.” As curre ntly written, it appear s to us that your
largest recurring operating expense in 2010 (other than cost of goods sold) will, at some

Andrew D. Mason Groupon, Inc. August 19, 2011 Page 2

 point in the future, be reduced to zero and th at investors should c onsider that expected
result when making an investment decision. In or der to help us evaluate this statement in
the context of your overall disc losure, please explain to us whether you actually expect
these costs to be eliminated and how and when  you expect to reach this point. In addition,
please explain to us how you plan to sustain such a model once it is  achieved, including a
discussion of your plans for sust aining growth and replacing lost customers.
 Non-GAAP Financial Measures, page 42

3. We note your response to comment six from our letter dated July 22, 2011 and your
references to CSOI outside of your segm ent footnotes on pages F-42 and F-72.  The
presentation of the total segm ent profit or loss measure in an y context other than the ASC
280-required reconciliation in the footnotes would be the presentation of a non-GAAP
financial measure.  Accordingly, please provide the non-GAAP disclosures required
under Item 10 of Regulation S-K.  Refer to Question 104.04 of the CD&Is at  http://www.sec.gov/divisions/cor pfin/guidance/nongaapinterp.htm

 Management’s Discussion and Analysis of Financ ial Condition and Results of Operations, page
44

Overview, page 44
  4. Please balance your disclosure concerning th e revenue growth in  your International
segment with a discussion of its escalating lo sses.  To the extent material, please identify
the geographical areas in which these losses were incurred and the reasons for these
losses.
5. On page 52 please provide a more detailed analysis for the operating loss at each of your
segments and explain why the International segment operating loss is significantly higher
than the North American segment operating loss as set forth on pages F-42 and F-72.
 Factors Affecting Our Performance, page 46

 6. We note your response to comment one from  our letter dated July 22, 2011.  Please
incorporate into your disclosure under “Deal  sourcing and quality” or other applicable
places your response that attracting repeat me rchants is not a strategic focus and your
general practice is to limit repeat merchants because of your desire to promote diversity
and manage merchant backlog.

Andrew D. Mason Groupon, Inc. August 19, 2011 Page 3

 Results of Operations, page 49

 Comparison of the Six Months Ende d June 30, 2010 and June 30, 2011, page 49

 7. We note your disclosure under Gross Profit on page 51.  Here you state that gross
margins decreased in part due to lower gro ss margins from your Asia-Pacific operations
which have substantially lower gross margins.   Please discuss the reasons for your lower
margins in this part of your business.
 Gross Profit, page 58

8. We note your statement at the bottom of page  44 and top of page 45 that gross profit
margins in your International segment are ge nerally higher than in your North American
segment.  However, page 58 states the “Asi a Pacific region has substantially lower gross
margins.”  Please expand your disclosure to describe how certain regions in the
International segment can have substantially lower gross margins that are offset by higher
margins elsewhere resulting in  gross profit margins that ar e generally higher than the
North American segment. Please provide a more detailed analysis of the geographical differences that can impact gross profit margins in the International segment.

Consolidated Segment Op erating Income, page 58

9. Tell us the nature and the materiality of the legal reserve related to the North American
segment as disclosed.
Acquisitions and the Recoverability of Goodw ill and Long-Lived Intangible Assets, page 65

 10. We note your response to comment 17 from our letter dated July 22, 2011.  It appears
that you have discrete financial information below the operating segment level that is not
regularly reviewed by the CODM.  Tell us whet her such discrete financial information is
attributable to business compone nts that may be deemed repor ting units.  In this regard,
please also tell us what your reporting units are for goodwill impairment testing purposes.
Refer to ASC 350-20-35-34.
 Fiscal Year 2011, page 68

11. We note your response to comment 18 from our letter dated July 22, 2011.
Supplementally confirm to us that the Chin ese joint venture did not have a material
impact on the company’s results of operations , financial condition, a nd cash flows during
fiscal 2011.  In this regard, we note vari ous press accounts that your joint venture,
Gaopeng, has a few thousand employees and up to 40 offices in China.

Andrew D. Mason Groupon, Inc. August 19, 2011 Page 4

 Subscriber Economics, page 77

 12. We note your response to comment 22 from our  letter dated July 22, 2011.  As stated in
your revised disclosure, you believe  that “total revenue and tota l gross profit, rather than
average revenue per Groupon sol d, are better indicators of [y ]our overall growth in each
market because these are the measures that [you] aim to maximize in each market.  In
addition, while gross profit increased in a manner consistent with the increases in
revenue, gross margins remained stable in each of these markets for the periods presented.”  In this regard, it is unclear to us why you did not disclose gross profit and
gross margins for each market case study pr esented.  Please advise or revise.
 Revenue Recognition, page F-11

  13. Considering your view that the Company, and not  the merchant, is the primary obligor in
the Groupon transaction, pleas e explain the terms and c onditions included in the
Company’s website that state “Vouchers you purchase through our  Site as a Groupon
account holder are special promotional offe rs that you purchase from participating
Merchants through our service” and further that  “The Merchant is the issuer of the
voucher and is fully responsible for all goods and services it provides to you” and why
you believe this is consiste nt with your view.

14. Please tell us what potential liabilities you may have to th e customers for the underlying
product or service, and if any of these liabilities are mitigated by your merchant
agreements.
 15. Please tell us if you have recourse to the merchant for any amounts you refund the
customer under the Groupon promise.  Further,  please provide your analysis of any other
terms in your merchant agreements that m itigate your risk including, but not limited to,
indemnification and other recour se rights that you may have.
 Stock Repurchase Activity, page F-28

  16. We note your response to comment 32 from our letter dated July 22, 2011.   Citing your
basis in the accounting literatu re, tell us why your repurchase of shares held by your CEO
at a price in excess of fair value w ould not be compensatory to him.

17. We note your response to comment 33 from our letter dated July 22, 2011. Tell us the
elements that comprise each Restricted Stock Unit and Performance Stock Unit. For instance, is each unit equivalent to a common share of your stock?
 4. Goodwill and Other Intangible Assets, page F-19

 18. We note your response to comment 35 from our letter dated July 22, 2011.  We further
note that you considered historical operating losses, losses expected in future years, and

Andrew D. Mason Groupon, Inc. August 19, 2011 Page 5

 the absence of reliable income forecasts as negative evidence in support of a full
valuation allowance against deferred tax asse ts attributable to net loss carryforwards.
Tell us your basis for developing income for ecasts and cash flow projections in testing
goodwill for impairment and whether the underlying assumptions differ from, or are consistent with, your tax projections.
19. Please provide us a detailed explanation of  the results of your goodwill impairment test
during the fourth quarter of 2010 pursuant to ASC 350-20-35 to support your conclusion
that goodwill was not impaired.
20. Tell us whether you performed an interim goodwill impairment test as of June 30, 2011
and your consideration of any impairment i ndicators. Within the goodwill section of your
Critical Accounting Policies and Estimates, pl ease disclose the following information for
each reporting unit (with material goodwill) that  is at risk of failing step one of the
goodwill impairment test:
 The percentage by which fair value exceeded  carrying value as of the most recent
step-one test,
  The amount of goodwill allocated to the unit,
 A description of the methodology us ed to determine fair value,
 A description of key assumptions used  and how the key assumptions were
determined, and
 A discussion of the uncertainty associ ated with the key assumptions and any
potential events and/or circumstances that could have a negative effect on the key
assumptions.

Condensed Consolidated Balance Sheets, page F-47

 21. Tell us the nature of your accounts receivable and the reason for its increase.

14. Segment Information, page F-72

22. As presented, your International segment acc ounts for a significant portion of your total
assets.  Tell us the nature of  such assets.   If it include s most of your cash and accounts
receivable, please expand your MD&A to separately  discuss your cash flows from
continuing operations for both the North Ameri can and International se gments, or tell us
why such discussion is not useful to investors.  Additionally please state, if true, that you
need to accrue and pay taxes if your foreign cash holdings are repatriated; and that you do
not intend to repatriate such holdings.
 Exhibit 21.1

23. Please file this exhibit with your next amendment to facilitate our review.

Andrew D. Mason Groupon, Inc. August 19, 2011 Page 6

 You may contact Kathryn J acobson, Staff Accountant, at  202-551-3365 or Robert S.
Littlepage, Accountant Branch Chief, at  202-551-3361 if you have questions regarding
comments on the financial statements and relate d matters.  Please contact  Ajay Koduri, Staff
Attorney, at 202-551-3310; Kathl een Krebs, Special Counsel, at  202-551-3350; or me at 202-
551-3810 with any other questions.
Sincerely,
   /s/ Terry French for    Larry Spirgel
Assistant Director
cc: Via Email

Steven J. Gavin, Esq. Winston & Strawn LLP