Only a few months ago, Groupon was the Internet's next great thing. Business media christened it the fastest growing company ever. Copycats proliferated. And investors salivated over the prospect of Groupon's going public — despite the fact that the business loses money.

Today, the startup that pioneered online daily deals for coupons is an example of how fast an Internet darling can fall.

Groupon is discounting its expectations for the IPO that in June was valued as high as $25 billion. In a regulatory filing Friday, the company said it expected a valuation that is less than half that, at between $10.1 billion and $11.4 billion.

It's the latest twist for Groupon's IPO, which was one of the most anticipated offerings this year. In June, after Groupon filed for the offering, the SEC raised concerns about the way it counts revenue. Then the stock market plunged.

Now Groupon faces concerns about the viability of its daily deals business model. The novelty of online coupons is wearing off. Some merchants complain that they are losing money — and customers— on the deals. And competitors are swarming the marketplace.

Groupon shows what can happen when a startup experiences steroidal growth in an unproven industry. To its defenders, the Chicago company is a victim of its success, its stumbles emblematic of a business in infancy. After all, Groupon has hordes of fans who rave about the company's deals and its liberal refund policy. And some merchants see the company as a way to get much-needed exposure.

But critics say the issues Groupon is facing are symptomatic of something more troubling: questionable accounting, an overvalued business model and an industry that is turning into the digital equivalent of junk mail.

Groupon is expected to go public Nov. 4. The company could not comment for this story because of the quiet period for its IPO, during which time company officials are barred by regulators from discussing anything about the firm. But interviews with analysts, investment managers and merchants tell the story of company that grew too fast as it raced to go public.

The scene was set for an IPO. In June, Groupon filed documents with the SEC reporting $713.4 million in revenue in 2010, making it the first company to surpass the $500 million revenue mark in its third year, according to Forbes magazine. But Groupon began facing a growing perception that its business was unstable.

The first concern stemmed from how Groupon accounted for its revenue.

Groupon roughly splits the money it collects from customers with merchants. But in the filing, Groupon reported all of its gross billings as revenue. Standard accounting principles dictate that Groupon should have used net revenue — the amount it keeps after paying the merchant.