December 27, 2010, 4:04 PM

Groupon struggles with success

Groupon was offline more than similar sites during the holiday season, WatchMouse says.

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Group-buying and social shopping operations such as Groupon, Woot and Swipely may be among the hottest properties in e-commerce, but their sites experienced performance issues during the holiday season that left consumers unable to access them or make purchases.

Groupon Inc. had the least reliable web site performance among 11 social shopping sites tracked by WatchMouse from Nov. 22 to Dec. 22, the web monitoring firm says. WatchMouse says the Groupon site was down for a total of more than 26 hours during the monitoring period, which means the site was available only 96.44% of the time. WatchMouse says 99.90% availability is the industry standard and that eight of the 11 sites it tracked performed at that level.

“Groupon is the fastest-growing company in Internet history, and ran a holiday campaign in the days leading up to Christmas,” says Mark Pors, chief technology officer and co-founder of WatchMouse. “Unfortunately, they have experienced problems related to overloaded servers and time-outs that have likely cost them significant revenues.”

Groupon acknowledges it had some performance issues this season, but notes that the two-year-old company continues to grow rapidly. Groupon suffered a widely reported outage Nov. 19—before the WatchMouse tracking period—when visitors overwhelmed the site and knocked it offline for several hours after apparel retailer Nordstrom Rack made an offer through Groupon. A Groupon spokeswoman says the Nordstrom Rack deal was the best-selling offer in the company’s history.

"Groupon created an entirely new class of e-commerce which has led to unprecedented traffic and demand on site resources,” a Groupon spokeswoman says in response to the WatchMouse report. “It's a problem many Internet category leaders have faced at some point. We've built a strong research and development team over the past few quarters, and they'll continue to grow and make the global Groupon network stronger and more dependable as we get older."

Traffic to Groupon.com reached nearly 8.6 million unique visitors in November, up from 1.8 million unique visitors in November 2009, says web tracking firm Compete Inc.

The eight monitored social shopping web sites that had at least 99.90% availability during the test period were Kaboodle, Tecca, Social Currency, RedLaser, Mobile Spinach, Bloomspot, Blippy and LivingSocial.

Falling below the threshold were Swipely (99.49%), Woot (99.27%) and Groupon. Swipely and Woot, No. 176 in Internet Retailer’s Top 500 Guide, did not immediately respond to inquiries about their holiday season performance. WatchMouse checked each site’s availability every five minutes during the test period.

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