Don’t Count Out LivingSocial As It Buys Majority Stake In European Deal Site
In the online deal space there is no doubting that Groupon is the 800 lb gorilla of the bunch. They have just received a whole lotta cash for their operations and their shareholders and are busy buying up competitors.
Every space, however, has its initial competitors that put up a fight for a piece of the pie. In the case of location based services, Foursquare has (or better said had?) Gowalla to push them. In search, there is Ya-Bing trying to play the well-funded David to Google’s Goliath. In social there is Facebook and….well, forget social. So anyway, in the online deal space LivingSocial is trying to stay in the game against Groupon. They have received a healthy $183 million investment themselves and it appears they are putting it to use.
Over at TechCrunch we learn
Social commerce startup LivingSocial this morning announced that it has acquired a majority stake in Europe’s Let’s Bonus (which sounds an awful lot like “let’s bone us”, but I digress). The partnership brings LivingSocial operations to a total of ten countries, with the addition of Let’s Bonus’ Spain, Italy, Portugal, Argentina and Mexico presences.
Terms of the deal were not disclosed.
LivingSocial says it now boasts more than 16 million subscribers, is live in more than 170 markets, and is projected to book in excess of $500 million in revenue in 2011.
Note: I left in Robin Wauter’s ‘editorial comment’ because it made me laugh.
This is not the only move that LivingSocial has made and if you are a subscriber to their service you may have noticed their attempt to differentiate themselves from Groupon by having different types of deals through different ‘deal ‘channels’ including LivingSocial Escapes (from purchase of Urban Escapes), LivingSocial Family Edition and Campus Deals.
On the infrastructure side, the new group that LivingSocial holds the majority stake in has 200 employees and offices in Barcelona, Madrid, Valencia, Rome, Milan, Lisbon, Buenos Aires and Mexico. They offer daily deals on gourmet dinners and other higher end activities.
All of this makes for some interesting times in the online deals space. Many have given the vertical’s crown to Groupon because they have the infrastructure and have garnered the most press of any other player in the increasingly fragmented space by far. Others are trying to poke holes in their model saying that it is easily replicated but the scale issue is a tough nut to crack for sure.
All the while LivingSocial is putting up impressive numbers. Started in 2007 and projected to do $500 million in 2011. That’s no small feat. It’s worth everyone’s while to give them serious consideration for use in addition to Groupon because most would say that if Groupon becomes the Google of the online deal space that would be bad. Of course, I didn’t even mention Google as a competitor in this space which is an idea tossed around a bit as well.
So how do you see this space moving forward? Does LivingSocial have a chance?