Amazon flings money at Groupon rival LivingSocial

livingsocial.top.jpg By Laurie Segall, CNNMoney staff reporter


NEW YORK (CNNMoney.com) -- Get ready for a clash of titans. As Google negotiates to buy daily-deal website Groupon in what is likely to be its most expensive acquisition ever, Amazon.com swooped in Thursday with a $175 million investment in LivingSocial, Groupon's most successful competitor.

The deal shines a light on just how lucrative the daily-deals market has become. LivingSocial is currently booking average daily sales of more than $1 million, and is projected to top $500 million in revenue in 2011, the company said. Based in Washington, D.C., the site has 10 million subscribers in the U.S., Canada, U.K., Ireland and Australia.

LivingSocial plans to use Amazon.com's massive e-commerce heft to fight off its older and larger rival.

"To be the biggest player in the local commerce space there is no one better to work with than Amazon," co-founder and CEO Tim O'Shaughnessy said in a prepared statement.

LivingSocial was founded in 2007 as a social discovery and cataloging network that let people share their favorite books, movies, restaurants and other finds. It launched its daily deals service in July 2009, eight months after Groupon pioneered the model.

It has a few unique twists: Every time a purchase is made, the user is emailed a link to share with friends. If three people purchase the deal using the link, the user's deal is free.

LivingSocial badly trails Groupon in daily use. In a survey tracking 81 group buying sites, measurement firm Experian Hitwise found that 79% of U.S. visits last week went to Groupon. Living Social got 8% of the traffic.

The company is backed by investors including AOL founder Steve Case, U.S. Venture Partners and Lightspeed Venture Partners. Lightspeed topped up Amazon's investment on Thursday with an additional $8 million of its own.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,195.42 221.11 1.30%
Nasdaq 4,566.14 16.91 0.37%
S&P 500 1,994.65 12.35 0.62%
Treasuries 2.30 -0.02 -0.77%
Data as of 7:37am ET
Company Price Change % Change
Facebook Inc 74.11 -1.74 -2.29%
Bank of America Corp... 17.03 0.04 0.24%
Intel Corp 32.58 -1.34 -3.95%
Avon Products Inc 9.97 -0.99 -9.03%
Apple Inc 106.98 -0.36 -0.34%
Data as of Oct 30

Sections

'Chevy Guy' Rikk Wilde became a viral sensation bumbling his way through a World Series presentation Wednesday night. More

The Da Vinci AiO 3-D scanner and printer doesn't really work, but it's an interesting concept. More

San Francisco-based Tumml is an accelerator fostering 'urban impact start-ups' that aim to tackle civic problems -- and turn a profit. More

Amy Kukec thought leaving her abusive husband would be the beginning of a new life, but so far she's hit one debilitating financial roadblock after another. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.