Last Updated: – AOL’s New Deal of the Day Site

AOL logo

AOL recently announced that they too will join the hundreds of other daily deal sites that are following in the footsteps of Groupon.  We think that AOL is well positioned to make this work even if they are just duplicating what many others are already doing.

How is Different?

As far as we can tell from the limited info on their website, they aren’t really different.  They say:

If you want a deal, we listen and offer up your bargain-of-choice on a silver platter at an astronomically discounted price, helping you stretch your hard-earned dollar to infinity and beyond. So be sure to stay tuned and prepare to be “wowed!”

What exactly does that mean?  Our guess is not much.  Judging from the image of a sample deal on their site, $25 for $50 worth of food at a Seafood restaurant, we don’t exactly get the vibe that they are about to turn this model on its head.

Will AOL’s Succeed?

If you define success as making a good chunk of change at high margins,  then the answer is yes.

We are assuming that between existing email lists and tons of available ad inventory, they will be able to acquire a very substantial number of subscribers.

For the here and now, lots of subscribers means lots of money in the local daily deals business.  If you have a couple hundred thousand subscribers in a city, a certain percentage will open the email and a percentage of that will buy.  Those percentages usually equate to a high margin cash generating business.

The quality of the deals they offer, though important, is not the key part of the equation.  Sending emails with good deals to hundreds of thousands of people will result in an impressive influx of cash as long as this continues to be a 30% – 50% margin business.

As soon as has live deals we will add them to

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