The fact that there are so many clones isn't proof that Groupon's business model works, it's just proof that there are no barriers to entry. Compared to Google and Facebook, their mailing list isn't much to brag about either. If they had impressive churn rates, you can bet we'd be hearing all about it by now. The fact that they keep those numbers secret is highly suspect, in my opinion.

Also, paying hundreds of millions out to early investors is exactly what they should NOT be doing if they're trying to "get ahead" of their competition. If they had any faith in their own business model, they'd put it into the business and expect even higher returns.