People shopping Black Friday

Associated Press

Group buying backlash is in full force, heightened recently by skepticism around Groupon's IPO and Facebook's decision to exit part of the deals business. But this is short-sighted: While the daily deals and group buying models will evolve, they're certainly not going away. Really, they're just getting started.

A better kind of coupon, a different kind of advertising

Yes, sites like Groupon are fairly new, but local merchants have been placing coupon ads in the media and offering discounts to groups for a long time. What Groupon did was to put the coupons on the web and insert itself into the credit card transaction. These were brilliant moves, and they've helped Groupon become an insanely fast-growing company.

Regardless of what happens to Groupon, the daily deal itself is still a solid advertising tool for companies whose business models support it. That will require some testing and some evolution, and many will discover that 50%-off coupons aren't sustainable. (It took e-commerce sites a while to figure out coupon codes in the first Internet boom, too. Many CD collections were built on free music from now-bankrupt startups.) Then this, too, can settle into a stable industry.

The future is mobile

Groupon has reached mass appeal because it's simple -- even someone with limited technology understanding can subscribe to an email newsletter, fill out a form, and print out a coupon.

But the future of group buying is on mobile devices. Why? Because they're always with you, can identify your location via GPS, and can access a network of real-time, instant deals.

This means that instead of paying today for a deal that you might use tomorrow or next month (or never), you can pay right now for a deal that you'll use right now. This is more immediate satisfaction, and can be a better advertising and lead-generation service for merchants, too: If a restaurant has empty tables or if a hotel has empty rooms, it can fill them quickly. (And on a busy Friday night, it doesn't have to worry about cheapskates coming in with 50%-off coupons.)

This will take a while to develop, as it will take a critical mass of people knowing to look for these deals when they need them, and merchants putting them up when they're available. But eventually, it could be very cool.

Winners and losers

Over the past year, it's hard to find a media company that hasn't tried to get into selling daily deals or group commerce. Some of have done better than others -- Travelzoo, for instance, is seeing growth from its local deals -- while many companies have not succeeded. Expect to see second and third attempts as the industry regroups.

The winners will be the companies who either have savvy sales forces that are in touch with local merchants, or those that can convince merchants to use self-service tools. Groupon and LivingSocial seem to have solid footing. Don't count Google or Amazon out, even though their early attempts are not particularly inspiring. And we wouldn't be surprised to see Facebook try again someday, perhaps with a partner or a different model.

The future of group buying

Expect to see more experimentation, more technology, and more evolution.

One thing we'd love to see is for one of these companies to develop a daily deal ad network -- where the deals are sprayed in real-time across many different web and mobile properties. Groupon is already working on this with its Groupon Now partnerships with Foursquare and other companies, but it could eventually grow across the mobile Internet.

Anyway, pay attention to the skepticism, know that the industry will change, but also know that it's not going away. It's a good deal for consumers, and coupons have always been helpful for businesses. It's only obvious that local merchants will increasingly advertise online once they're given better tools. Expect to see plenty of interesting things in group buying over the next several years.

More from our special report on The Future of Group Buying: