If you doubted, even after Facebook’s recent $50 billion valuation, that there’s a mini-bubble inflating in tech land, this morning’s New York Times ought to disabuse you of that notion.

The paper reports that Groupon, which turned down $6 billion from Google last month, is in talks with Wall Street for an IPO that Wall Street is pitching to investors valuing the company at between $15 billion and $20 billion.

The NYT says the two-year-old Groupon “is pushing ahead with plans for its initial public offering,” and I’m sure it is. I’d be pushing to cash in too before this bubble pops.

There’s not much analysis here—it’s a straight news story. We’re told that Groupon has a billion dollars in revenue a year, but we get no numbers on how profitable it is.

And while the Times points out that Groupon just got a $950 million injection from investors two weeks ago, it doesn’t tell us what it valued the company at. That’s a hole in its story. That round of funding valued the company at between $6.4 billion. So the supposed price of the IPO would value Groupon at more than double what it was worth to Morgan Stanley and Co. two weeks ago.

And while the Times mentions “a particularly frenzied period for Web start-ups,” it has no context about the potential difficulties facing Groupon’s business model.

The big one is it’s easy to copy. It doesn’t quite have the network effect that Facebook or Twitter has. If a competitor can offer a better deal, customers can find out about it easily and take it.

We already know that spurned Google is creating a competitor and will give it a major leg up on its search engine. Facebook or Twitter, for instance, could get into the game quickly, too. Right now Groupon may have high margins. But competitors (including local media outlets whose collective sales staffs dwarf Groupon’s) will drive those down fast.

Also, the whole Groupon thing itself may be something of a bubble—a fad both for customers and for the restaurants, salons, and yoga studios that give it an awfully high cut of their revenue.

Let’s remember what this company does: It’s a coupon site. Fifteen to twenty billion?

Here in Seattle, the main deal for me yesterday was $17 for $35 worth of food and drink at a place ten miles away called June. But the discount June is giving is much more than $18. Groupon takes about half of that $17. So if I buy the Groupon, I get 35 bucks worth of food and June only gets $8.50 from Groupon. Groupon gets the other $8.50—which is a sweet deal for it.

The hope, of course, is that I’ll become a repeat customer or buy a bunch of high-margin booze with my meal. Well, maybe.

But Rice professor Utpal M. Dholakia this summer found that a significant number of businesses weren’t thrilled with their Groupon experience and that was one of the major reasons why:

In my study sample of 150 businesses that ran Groupon promotions between June 2009 and August 2010, 42% said they would not run a Groupon promotion again. Their main reasons were that a significant proportion of Groupon redeemers are extremely price sensitive, barely spending beyond a discounted product’s face value. Not surprisingly, repeat-purchase rates at full price were also low — just 13% — for these businesses.

That means most retailers would consider doing Groupon again. But 42 percent is an awfully high number to be one and done.

And let’s face it, if you start offering your services and food at fire-sale prices, you make it less likely that anyone’s going to want to pay full price later, as Dholakia points out:

My findings are consistent with abundant academic research showing that price promotions erode brand value and have few, if any, beneficial long-term impacts for businesses.

Let’s do a smell test: If Groupon is valued at $20 billion will be worth more than companies like Allstate, Xerox, Best Buy, CBS, Qwest, Marriott, Adobe, Raytheon, Alcoa, and Vornado. Does that make any sense?

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