I've bought stuff off LivingSocial and it was because they had deals that were really fun (ex. white water rafting.) I got a number of my friends to also buy so we could all go together. I bought other things from afterwards... particularly if they were fun or social, such as skydiving. In examining my experience, I see a few factors at play:

* Sell what people want to buy.

* Connecting with an audience that will buy repeatedly.

* Incentives to spread the deals. The activity may be social in nature (such as white water rafting) or they might have a financial incentive (get 5 people to buy and yours is free.)

I'm not sure if the other knockoff's had these elements but I could see how they helped LivingSocial earn at least $1000 from me and my friends in the last year.

The first part (why are some succeeding?) is an interesting one. I'll venture a couple:

(a) This business not a natural monopoly to the same extent as many online businesses. Groupon have (I think) one offer at a time. If you're in the mood for groupon, why not check in on five, see what they have today? They could of course have lots of deals but that'd be doing things differently.

(b) Groupon is about localization at the city level. Their are still more cities than Groupon can take. Being the best dealoftheday site for Newcastle is an achievable goal. Maybe this is a subset of the former.

I've done some modest research here, and it seems like the surest sign that one is going to die is when the deals start being every other day, than once every few days, etc. I've yet to see one recover from this downward spiral.