SecProbe.io

October 3, 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. 3 to Form S-1 Filed September 23, 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.
 General

 1. You discuss gross billings th rough the prospectus, includi ng the Prospectus Summary,
Summary Consolidated Financ ial and Other Data, Risk Factors, MD&A and Business
sections.  Please revise the disclosure throughou t your prospectus to e xplain in detail why
you believe gross billings is a ke y operating metric that is an  important indicator of your
growth and business performance as you state on page 48.  Specifically explain how an
investor should evaluate this disclosure.  In ad dition, make clear to the reader that it is not
equivalent to revenues or any other financial metric that is presen ted in your financial
statements.

Andrew D. Mason Groupon, Inc. October 3, 2011 Page 2

 Risk Factors, page 11

 In making your investment decision, you should not rely on a memorandum sent by our Chief
Executive Officer..., page 29
 2. So that investors may understand the full contex t of Mr. Mason’s ema il, please include an
unedited copy of the August 25, 2011 email as Appendix A.
 Letter from Andrew D. Mason, page 33

 We don’t measure ourselves in  conventional ways, page 34

 3. We note your response to comment two fr om our letter dated August 19, 2011.  In
particular we note your statement that the company anticipat es it will reach the
conclusion that the resources presently being devoted to such online marketing initiatives
are not yielding sufficiently attractive investment  returns due to a variety of factors such
as changes in subscriber economics, market saturation, or other cost effective marketing
initiatives like word of mouth.    We al so note you do not an ticipate the significant
decrease of such online marketing initiatives (currently $345.1 million for the first half of
2011) to adversely affect your ongoing busine ss with existing customers or subscribers
because such expenses are not designed to driv e these transactions.   Please revise your
Management’s Discussion and Analysis sec tion in the appropriate places such the
discussion under “Subscriber ac quisition costs” on page 50 to  incorporate these expected
trends.
 Management’s Discussion and Analysis of Financ ial Condition and Results of Operations, page
47
 4. Please note that in addition to a discussion of your consolidated operating results, it
appears that your MD&A should also provi de a separate discussion of revenues,
profitability and cash needs by segments.  In this regard, we refer you to section 501.06.a
of the Financial Reporting Codificat ions.  Please revise or advise.
 Results of Operations, page 53

 5. We believe that the current presentation of gross billings  on pages 53 and 56 gives this
metric undue prominence.  Instead, we be lieve your discussion should focus on your
revenues.  In this regard, we refer you to your disclosure on page 48 where you
specifically state the amount that you retain – rather than bill or collect – from the sale of
Groupons is the key measure of the value you cr eate.  If you retain the gross billings
metric, please also present revenues and ne t loss with equal prominence to ensure a
balanced discussion .

Andrew D. Mason Groupon, Inc. October 3, 2011 Page 3

 Critical Accounting Policies and Estimates, page 67

 Acquisitions and the Recoverability of Goodw ill and Long-lived Intangible Assets, page 68

 6. We note your response to comment ten from  our letter dated August 19, 2011.  Please
clarify to state if the component levels c onsist of EMEA, APAC and LATAM or each of
the different countries within  the Internati onal segment.
 7. Per an interview of Mr. Ma son by the Wall Street Journal published on September 23,
2011, following the departure of Ms. Georgiadis, we note that he was quoted to have said
that the company will “reorganize in a way that  reflects our evolving strategic priorities.”
He also said sales, channels, internationa l and marketing will now report to him.  It
appears that the reorganization enables and requires Mr. Mason as CODM and
International Segment Manager, to regularly review discrete financial information below
the International operating segment level.   Tell us whether each component of the reportable International segment may be  deemed an operating segment.
 Business, page 75

 Subscriber Economics, page 80

8. We note your response to comment 12 from  our letter dated August 19, 2011 and your
disclosure on page 81 that revenue across each of the cities increased in a manner
consistent with increased gross billings.  Please provide more detail and analysis
regarding the increases in revenue, such as discussing whether increas es in revenues for
the North American cities were different or si milar to increases in the international cities
or whether some cities achieved greater or lesser increases.
 Description of Capital Stock, page 132

 Class A and Class B Common Stock, page 133

 Conversion, page 134

 9. We note that the Class A and Class B comm on stock will automatically convert into a
single class of common stock fi ve years after the completion of this offering.  Please
explain the reasons and the effect of this pr ovision.  For example, disclose how this will
impact the voting control and other rights th at the Class B common shareholders have
over the company.  Also disclose whether a nd how this provision could be amended.
Highlight this automatic conversion elsewher e, such as the Prospectus Summary and
Principal and Selling Stockholders sections of the prospectus.

Andrew D. Mason Groupon, Inc. October 3, 2011 Page 4

 Choice of Forum, page 138

 10. Please explain to us, and revise as applicable to address, the enforceability of the choice
of forum provisions in your certificate of incorporation.
 Financial Statements

 Note 3. Summary of Significant Accounting Policies

Refunds, page F-11
 11. If true, please clarify in your  policy disclosure that the co mpany records an allowance at
the time revenue is recognized rather than at the time of sale.  Also, in the two instances
in this policy note where you refer to am ounts “recovered” from merchants, please
change the word recovered to recoverable.
 Revenue Recognition, page F-12

 12. Please revise your revenue recognition policy disclosure to be consistent with the
representation made to us in  your response to comment two appearing on page 11 of your
letter dated September 23, 2011.  Further, you should revise to specifically include
language regarding your remain ing obligations after issuan ce of the Groupon and explain
why such items are not more than inconseque ntial or perfunctory resulting in revenue
recognition upon the purchase and issuance of the Groupon.

13. It is unclear in your policy disclosure why the criteria for revenue recognition are
“generally” met when the number of custom ers who purchase the daily deal exceeds the
predetermined threshold.  Please disclose the exceptions to the general rule and advise us in detail.
 Consolidated Statements of Operations, page F-5

 Cost of Revenue, page F-13

 14. We refer to your response to comment one fr om our additional comments raised during
our call with you on September 21, 2011.  We believe that costs of revenues should
include the costs and expenses, both direct and indirect, incurred each reporting period to
fulfill your obligations to the merchant, irrespec tive of whether such costs are separately
tracked or identified as “overhea d.”  It is not clear to us from your response or proposed
disclosure whether your cost of  revenue line item includes all such costs.  For example,
we note that Section 1.1 of your form Groupon Merchant Agreement requires the
company to “promote the voucher per Section 1.2.”  Further, Section 1.2 states that
Groupon is “to offer, sell and distribute Vouchers, in accordance with this Agreement.”
We are unable to identify in your proposed cost of revenue disclosure the costs and

Andrew D. Mason Groupon, Inc. October 3, 2011 Page 5

 expenses incurred to fulfill these obligations to the merchant.  Please provide the amount
of these costs and expenses for each period presented and explain to us why you do not consider these as part of cost of revenue.
 Goodwill and Other Intangible Assets, page F-19

 15. We note your response to comment 19 from our letter dated August 19, 2011.  We note
that you refer to an evaluation of goodwill impairment.  Based on your response, it is
unclear whether you performed an annual goodwill impairment test or just a qualitative
evaluation.  Please advise.
 Other

 16. Please clearly disclose your policy for classi fying expenses within the Selling, general
and administrative line-item of your income statement.

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, Kathleen Krebs, Special Counsel, at 202-551-3350, or me at 202-
551-3810 with any other questions.

Sincerely,
   /s/ Kathleen Krebs for    Larry Spirgel
Assistant Director
cc: Via Email

Steven J. Gavin, Esq. Winston & Strawn LLP