Groupon's initial public offering price of $20, some six times forward revenue for a then-unprofitable company, was absurd. But the Internet-coupon company deserves credit for its staying power.

When Groupon filed documents to go public in 2011, marketing costs absorbed more than half its revenue. By the first quarter, they ate up just 8%. Such shrinkage has hit growth but not caused the tailspin some feared.

Moreover, Groupon actually does have barriers to entry, including its big user base and a world-wide sales force of over 4,000. Granted, labor isn't as valuable a differentiator as technology. But Groupon's most formidable long-term rival for local ad dollars, Google, would prefer merchants buy its ads on their own. The truth is, most merchants need help, and relationships with them should prove strategic over time.

The question is whether Groupon can maintain growth while hitting long-term margin goals. The top line has been hampered by the company's messy international segment, which Groupon is still trying to integrate after several deals.

Still, a flip in Groupon's business model to make it more useful for customers should reignite momentum. It now keeps deals active on its site for longer so customers can get the ones they want, when they want them. That is preferable to the email blasts it has long relied on.

Eoin Treacy's view There was a great deal of hype surrounding social media companies last year; when they were fetching princely sums at their initial public offerings. Following what have been in some cases quite precipitous drops, at least some valuation contraction has occurred and investors have had greater opportunity to address their business models. The sharp pullbacks experienced following their IPOs prompted many social media companies to rationalise their business models and those that have successfully instituted reforms have been rewarded with some firming in their share prices.

Groupon bottomed in November, broke its progression of lower rally highs by January and continues to trend steadily higher. It found support two weeks ago in the region of the 200-day MA and a sustained move below $6.80 would be required to question medium-term scope for continued upside.

LinkedIn has been ranging above $160 for the last few months in a relatively gradual process of mean reversion. It firmed from that level last week and a sustained move below the 200-day MA, currently near $150, would be required to question medium-term upside potential.

Yelp hit a medium-term low near $15 in November and continues to trend consistently higher. A sustained move below the early June low near $28.75 would be required to question medium-term upside potential.

Pandora Media hit a medium-term peak near $20 in May and has pulled back to test its progression of higher reaction lows. A sustained move below $14 would be required to question medium-term potential for additional upside.

Yahoo and Yahoo Japan had surged higher from December and at least paused over the last month in a process of mean reversion. A sustained move below the 200-day MA would be required to question medium-term scope for additional upside.

AOL returned to test the region of the 200-day MA in May and firmed from it last week. A sustained move below $35 would be required to question the consistency of the medium-term advance.

WebMD Health Corp bottomed in November and has held a progression of higher reaction lows since. It has paused in the region of $30 for more than a month and a sustained move below $27.75 would be required to question potential for continued upside.

Both Facebook and Zynga remain under pressure and will need to sustain moves above their respective 200-day MAs to confirm a return to demand dominance.