purchased through their Ning sites, and Groupon will extend its reach potentially to tens of thousands of new sites with strong communities who perhaps would like to start buying things together. The program is in limited beta now, and will be rolled out as an option for all Ning sites by early next year.

Besides Ning, Groupon may soon strike similar deals with Yahoo, eBay and Citysearch. The goal is to become the de facto brand for daily deals.

As we’ve noted before, there is a lot of competition in the daily deal space and there is a real danger that margins could one day collapse. Although, it’s hard to say what the saturation point is for these types of offers. One of the best things Groupon has going for it is its first-mover advantage, amazing economics, and its growing brand. These types of partnerships are all about blowing out distribution even bigger than Groupon can do on its own. The margins will be smaller, just as with all affiliate networks, but it is the same strategy Amazon pursued successfully with its affiliate program, or even Google with AdSense.

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Authors: Erick Schonfeld

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