A public company in the gutter tends to attract a ton of attention. When things turn south, everybody has an opinion -- and it's rarely constructive. Rather than beating a dead horse, it'd be better to talk about how to save a troubled company. The suggestions may not reach the upper echelons of management, but at least it's constructive.

Dark times
Call it a tough economy, a flawed business plan, or just bad luck, but Groupon (Nasdaq: GRPN) is bottoming out big-time. The company led off this week with news that its early investors, such as mega venture capitalist firm Andreessen Horowitz, have cashed out of the company less than a year after its public debut.

Now, it's not uncommon for a VC to make an exit once an investment goes public -- that's kind of the idea -- but this didn't sound like a victorious exit. This one was more like a lackluster end to a relationship. Though Andreessen Horowitz still made a pretty penny from its investment, approximately $14 million, the news translated to the daily deal firm's fundamental supporters withdrawing their confidence (i.e., money) from the company.

Revenues have been ticking up quarter after quarter, albeit at a slowing pace, and the company even had a positive bottom line this quarter. But it wasn't enough to convince the elephant in the room to kindly leave. It's a very opinionated elephant who lives in Groupon's room -- with complaints about the fact that the company went public too soon with a business plan that wasn't shareholder- or analyst-friendly. Also, it's been noted that local businesses have not enjoyed the benefits promised by Groupon, as shown by the dramatic slowdown in growth.

So what can the company do to survive? Can it survive?

Something there
I am a critic of Groupon's practices, but I fully agree with the opportunity CEO Andrew Mason sees. The local small-business market is anything but small; we're talking trillions of dollars. And with big-box retailers such as Wal-Mart (NYSE: WMT) leading the way with unbeatable pricing power and marketing ability, it's only getting harder for the little guy. To find a way to successfully drive customers to these small businesses where they then become recurring clients would be a tremendous coup. And that's what Groupon set out to do in the first place.

Wal-Mart netted more than $4 billion in the last quarter alone. When this company decides to "re-think" product strategy, it brings in 10,000 new products to stores over a period of weeks. The sheer scale of Wal-Mart is enough to deter anyone from even applying for a small-business loan.

My point in all this is: Groupon has a tremendous opportunity. It's the market leader for daily deals and has the stickiness to remain in that position. Its current model doesn't work for its merchant partners, but that doesn't mean it can't.

Realignment
Instead of absurdly cheap one-time sales, which do nothing but get the consumer a sweet deal, Groupon could pursue the customer loyalty route. By managing loyalty programs for small businesses, Groupon can leverage its wide reach by offering deals to consumers over time, effectively driving customers to the stores again and again.

When I go to the local coffee shop, I get a stamp on my caffeine addicts card. After 10 coffees, I get a free one. Is it the best deal in the universe? No. But, when I am choosing a coffee shop, I tend to gravitate there, as it is in the forefront of my mind. Groupon can leverage this phenomenon to an incredible scale.

The strategy is halfway between what Groupon does now and what Facebook (Nasdaq: FB) thinks it's doing. Facebook's pitch to advertisers is that it can build relationships with their target audience via the social networking site. That sounds nice. I would love to have a nice "relationship" with Seagram's. The thing is, businesses don't need friends -- they need business.

In the meantime
Is Groupon heading in this direction, or will it find another solution to its woes? I don't know. The company is trading near its 52-week low and could break through that bottom to find new levels of sadness. For now, if the value-seeker in you is getting turned on by its bottom-of-the-barrel valuation -- remember it's because the company is at the bottom of the barrel.

Facebook is another troubled Internet company at the moment, but our analysts hope to clear things up by offering this premium report. Click here to read about the opportunities and hurdles facing the world's biggest social network.