When they have more to gain from a closed system. It worked for AOL for a long time, maybe it can also work for
Gilt Groupe, Groupon, and other localized social shopping discount websites.
Most interestingly, neither of Gilt nor Groupon try search engine optimization to sell their offers: traditional SEO is the antithesis of their businesses. These custom shopping sites get special deals from merchants who can offer lower prices because the products will not appear in Google searches and there is no fear of price wars from competition.
Efficient pricing is great for the open internet, but bad for businesses. Ubiquitous, instant, free, continual, direct product comparisons drives price towards marginal cost quickly and can reduce profit to zero. Information inefficiency is the best way for e-commerce retailers to protect their profit margins, and they can do this with teaser offers on targeted social shopping websites such as Groupon.com and Gilt.com.
Information inefficiency was the natural state in which we existed pre internet, but now it must be carefully manufactured.