Facebook/GroupOn Valuation: Putting Each Other to the Test With Facebook Places

Facebook launched its GroupOn/LivingSocial daily deals competitive offering in a few markets.  This is going to help answer two questions at the heart of two of the dominant models on the Internet today. First, it’s another test, like Messaging and Places, to see whether the Facebook social graph conquers all, justifying its “Jack and the Beanstalk” valuation.  Second, it’s a great test of the hypothesis that GroupOn’s growth and margins are unsustainable, because of the lack of entry barriers.  (Rumors are that Facebook is taking a smaller cut from merchants than GroupOn, so it will interesting to see how quickly this puts pressure on GroupOn’s pricing power.)