I had a dinner with some friends last night and explained to them what LivingSocial/Groupon was all about. (see that note below) Then today this too-good-to-be-true offer came in which just emphasized my point on why people love these companies.
Posted January 19th, 2011 at 12:56 pm by Gavin O’Malley
It looks like Groupon rival LivingSocial hit it big this week after offering members a $20 Amazon gift card for $10. “In just the first few hours of the sale, users have already purchased over 243,000 coupons,” reports ReadWriteWeb. How did LivingSocial land such a sweat deal? Well, as you may recall, Amazon invested $175 million into the startup in December. As such, Lightspeed Venture Partners’ Jeremy Lew calls this week’s deal “the first step of operational integration from that investment.” According to ReadWriteWeb, “Some are predicting the deal is on a course to outperform the previous blockbuster daily deal, when Groupon offered $25 off a $50 purchase at the Gap.” That resulted in some $13 million worth of coupons being sold. With nearly a day left to go, the LivingSocial deal had already sold over $2 million worth of coupons Wednesday morning. The final sales figure likely means little to Amazon, which is more interested in marketing the LivingSocial brand. Indeed, with Amazon’s help, it’s not hard to imagine LivingSocial achieving Groupon-like heights.
From: Larry Weintraub
Sent: Wednesday, January 19, 2011 12:01 PM
To: My Friends
Subject: FW: 50% Off Amazon.com Gift Card
Last night at dinner we had a conversation about Groupon / LivingSocial. Today this came in from LivingSocial. $20 gift card for $10 from Amazon. No expiration date, limit one.
On a typical day and a typical deal, LivingSocial or Groupon will get anywhere form 300 – 3,000 people to buy one of these offers. Today’s offer from LivingSocial is already over 650,000 and will probably hit 1 million today. So, if you wonder why Google was prepared to pay nearly $6 Billion for Groupon (which they declined and I bet we see a similar offer coming soon for LivingSocial), now you know why. They will do $20 Million in business today alone. Doesn’t mean they are profitable, just gives you an idea of how big these things are.
By the way, I recommend you sign up to LivingSocial today and get this deal. It only lasts til the end of the day and then it’s gone. You can unsubscribe after that if you don’t want to get emails every day from them. But hek, it’s $10 free to spend at Amazon.