Amazon Invests $175 Million In LivingSocial
The cash influx comes as Google is said to be negotiating to acquire local daily deal competitor Groupon.
The big boys -- Amazon and Google -- are poised to become more involved in the online daily deals business. LivingSocial announced that it has secured a $175 million investment from Amazon while Google is said to be continuing negotiations about acquiring Groupon for a reported $6 billion.
LivingSocial announced the Amazon investment Thursday. "To be the biggest player in the local commerce space there is no one better to work with than Amazon," said Tim O'Shaughnessy, LivingSocial CEO, in a statement.
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LivingSocial said the Amazon investment will be used to expand the overall business growth of its 120 locations in the United States, Canada, the United Kingdom, Ireland and Australia. The company, based in Washington D.C., said it has daily revenues of more than $1 million and is projected to surpass more than $500 million next year. It entered the Australian market recently by acquiring Australian firm Jump On It. LivingSocial said it's expanding into new locations at a rate of one a day.
Groupon, based in Chicago, is much larger than LivingSocial -- five to 10 times larger, according to some estimates. Both social networking companies operate in roughly the same way, offering daily bargains to subscribers in local regions.
LivingSocial noted that it recently expanded its business with an acquisition of Urban Escape, an adventure travel company. The company said it addresses three vertical markets -- family, campus and travel editions.
The two firms would also put some famous businessmen in competition with each other. Steve Case, the founder of AOL, is an investor in LivingSocial, and Ted Leonsis, another early AOL executive, is on the Groupon board. O'Shaughnessy is the son-in-law of Washington Post Company chairman Donald Graham.
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