Well it's definitely not a one-for-one distribution, but those Groupon dollars do make it around. Our site has Groupon ads popping up almost constantly, and actually tend to yield a higher clickthrough.

Massive injections of capital into Internet businesses do help overall economy of web startups. The danger, like the Yahoo comment earlier, are the spotty business models and expansion that are built on that frothiness. Cause when it goes, it's those startups that crumble first.

The ones that figure out a business model that isn't tied to a flush VC climate should be ok. eBay as I recall, did just fine after the first bubble.