Tag Archives: Living Social

Groupon’s Mihir Shah at Where 2.0: Tech Unit ‘Deeply Integrated’

Chicago-based Groupon is pushing hard in Silicon Valley to build a major tech presence on the back of Mobility, a mobile services firm purchased last year. One piece of evidence: a billboard on the 101 touting the company as a place to work.

At Where 2.0 today in Santa Clara, VP and GM Mihir Shah said the company has put together “a really large team” in Palo Alto from the product and tech perspective. “It is very integrated with everything else. We are not just some outpost in the Valley.”

Shah says that mobile is especially critical to Groupon’s development. “We’ll have a mobile app across all platforms,” he said. “Over the next few years, we are focusing on how to build the product from the bottom up.”

A hit out of the box for the mobile team has been a bar code scanning app for merchants, which allows consumers to bring their phones to stores without printing out a Groupon. “ A lot of merchants are getting very tech savvy very fast,” says Shah.

Looking forward, Shah says that Groupon will use mobile for instant deals, which are ideally suited for mobile. He says Groupon will typically show 3-4 restaurant deals for lunch, for instance. Instant deals enable merchants to really control their own destiny, offering deals on the fly for down times, for instance.

The big thing from a corporate point of view is such an offer gives Groupon broad coverage it could never get from just offering one or two deals a day. “The big thing is scale,” he says “Now you have coverage.”

Groupon of course , does not have the space to itself. Last week, Living Social launched in Instant deals in Washington DC with 31,000 takers.

Another area that Groupon may be looking at is the secondary market for Groupons that aren’t being used. “Off shoots (of the main Groupon product) will spring up. We’ll look at whether they they make sense for us.”

Living Social Joins Instant Mobile Deal Space

Instant deals designed for mobile consumers on-the-go look like the next big extension in the deals space. Living Social told AllThings D that it is offering instant $1 “Walk In” deals for lunch in its headquarters city of Washington DC as a promotion for its mobile apps. Users who sign up for the feature will see all days within a half-mile of their GPS-enabled location. Users buy the deals right on their phones.

The entry by Living Social into the instant deals space follows earlier efforts by TipCity, which has partnered with The San Diego Union Tribune to provide instant deals; and New York-based GroupTabs.

TipCity has a paperless system –users simply say “TipCity” to counter people. It works with restaurants on an account basis. Another site, GroupTabs, is a mobile app that provides discounts after thresholds are reached for a promotion (i.e. 20 people buying a margarita within a two hour window). GroupTabs made a splash when it kicked off last August but has not been heard of since.

Living Social Deal of the Day: They’ll Match $5 Japan Donation

Here’s a good deal: Donate $5 for Japan Relief to the U.S. Red Cross, and Living Social will match it (up to $1 million). If you are already registered with Living Social, it’s as easy as 1-2-3.

“Due to Friday’s 9.0-magnitude earthquake, tsunami, and subsequent after shocks, Japan is suffering from what its prime minister is calling the “worst crisis since WWII.” The country’s northern coast has been totally devastated, leaving the land and the people in ruins. Just like you, we here at LivingSocial want to lend a hand, so we are going to match your donations. For each $5 donation through this offer, we will also donate $5 to the American Red Cross Japan Earthquake and Pacific Tsunami fund, for a total contribution of up to $2 million. Our thoughts go out to everyone affected by this tragedy, and hope that by merging our efforts with yours and working directly with the American Red Cross, we can help with immediate aid and long-term recovery plans in Japan.”

Living Social COO Eric Eichmann is keynoting our Deal of the Day Forum at ILM East next week in Boston.

THIS is E-Commerce: Living Social, Amazon Score 1.2 Million Sales

When Amazon made its deal to invest $175 million in Living Social, it wasn’t entirely clear how Amazon played in the local deal space. Sure, Amazon has its own non-local deals. And it owns Dallas-based Woot, a product-based deals provider. Still, it wasn’t clear.

Today, we have a better idea how they play together. Amazon put a deal up with Living Social where users could pay $10 for $20 of anything from Amazon. Anything — such as a $139 Kindle, they suggested. If you get three friends to buy the deal via Facebook, Twitter or your blog, you get another free one.

The deal has 1,216,872 buyers as of 8:47 pm, pacific time (including me.) What is unusual about the deal is that it is being treated as one giant promotion to join Living Social.

In fact, LS has paid Amazon full value for the $20 coupons, according to The New York Times. The 1.2 million coupons that have already been sold will cost about $12 million (although I bet there was some discount involved.)

It is surely a different way to spend money on marketing than Groupon’s pregame SuperBowl ad. And it will cost a lot more. But it is getting a lot of attention, and puts the #2 player on the map. And it is a healthy way for Amazon to win back a little of its $175 million.

Living Social CEO Tim O’Shaughnessy is a featured speaker at ILM East in Boston March 21-23, along with Gilt City CEO Nathan Richardson and many others.

Living Social Gets $175 Million From Amazon: Amazon’s Local Strategy?

Fresh in the wake of reports that Google will spend at least $5.3 Billion on Groupon, Living Social — the Avis of Deal a Day — has announced a $175 Million investment from Amazon. It simultaneously announed an additional $8 Million investment from Lightspeed Venture Partners.

“If you want to become the biggest local commerce player, it makes sense to have the largest commerce site as an investor,” said CEO Tim O’Shaughnessy in a Facebook post.

Concurrent with the deal announcement, LivingSocial announced that it is averaging $1 million a day in booked revenues. While current revenue may be $300 million, it is projecting well over $500 Milllion in revenue in 2011 It also reports 10 million email subscribers. By comparison, Groupon was estimated in a report today to have 35 million email subscribers and a run-rate of $1 billion a year, or twice the general assumption that Groupon makes $500 million a year.

While LivingSocial and Groupon are battling each other for deal-a-day in major urban and suburban areas in the U.S. and abroad, there are some key differences between them. First of all, LivingSocial is aggressively verticalizing in a different way than Groupon, which seems focused now on extending to SMB marketing services. Recently, LivingSocial acquired Urban Escapes, an launched LivingSocial Escapes, a travel site that offers savings on “curated adventures.” It also launched two other verticals: LivingSocial Family Edition and Campus Deals.

Another big difference: LivingSocial uses its own feet-on-the-street sales people in each market, while Groupon relies more on its massive telemarketing presence.

The investment from Amazon in LivingSocial is interesting on several dimensions. It complements Amazon’s long-running “Today’s Deals,” which has its own massive list; and Woot, a recently purchased deal-a-day site that features products. With the new investment, and assumed partnership, those sites can go more local, while LivingSocial offers occasional national deals.

The investment also revisits the notion of Amazon as a local player, an idea pretty much dropped a few years ago, when Amazon abandoned its A9 local business directory. There always seems to be a massive opportunity for deal-a-day to morph into a dynamic directory and city guide.

Washington Post Goes With Deadline Deals for ‘Capitol Dish’

The competition among white label “deal a day” providers is increasingly intense. At the same time, local media companies are beginning to verticalize their deal a days to differentiate themselves.

Case in point is The Washington Post, which has rolled out “The Capitol Dish,” a website and newsletter offering dining deals to DC-area restaurants. The Post has teamed up with Second Street Media’s Deadline Deals product.

The vertical product is in addition to The Post’s Daily Deal arrangement with Living Social, which includes some exclusive deals, but does not focus in on a specific vertical, or utilize The Post’s sales force.

Deadline Deals is currently being used in over 50 markets by a number of Lee Enterprises newspapers, including The St. Louis Post-Dispatch; as well as a number of TV stations. One feature of Deadline Deals that stands out is that it tightly integrates an email solution for sending subscribers an update about each day’s deals.

It also includes integrated maps, data export and reporting, consumer support, and credit card processing. Second Street Media, which is the parent of Deadline Deals, figures that local media partners are taking in between $10,000 and $40,000 a month in new revenues from its deals.

Gannett’s ‘Deal Chicken’ Goes it Alone in Arizona

The deal a day model thrives on the power of its email list, sales channels, promotion, clever copywriting and vendor selection. Newspapers and TV stations should be especially well positioned to leverage these strengths, right? Many, in fact, are diving in to deal a day via partner relationships with Groupon and LivingSocial, or vendor relationships with the likes of Deal Current, Analog Analytics, Shoutback, Matchbin, Nimble Commerce and Offer Foundry.

Going it alone, however, is Gannett’s Republic Media, the holding company of The Arizona Republic, AZCentral.com and 28 other media and vertical sites. Republic’s Deal Chicken has been since Sept. 1, and already has 30,000 emails and 2,268 “likes” on Facebook. It ought to be able to double its email count by the end of the year, says VP of Digital Media Mike Coleman.

The Deal Chicken motif brings with it lots of branding possibilities for social media and daily emails (and has been cleverly executed.) “The Deal Chicken Knows No End” is the tagline. Some of the Facebook posts say things like “The Deal Chicken especially likes Prix Fixe Meals.”

All the writing is done on a freelance basis by contractors, rather than by more expensive newspaper staff. Unlike some of the other deal a day sites, the writers also personally interview merchants and provide feedback when deals are completed. They also receive a cut of the revenue.

“The brand is light and fun on purpose,” adds Coleman. “And we thought it was extremely important to come up with a very memorable brand, especially in light of the many, many similar sites competing for consumer attention. We don’t think ‘PhoenixDeals.com’ would cut through the clutter.”

Coleman said the company looked at its deal a day options, and thought it had plenty of internal resources and didn’t need to give away 5-10 percent of its earnings to a vendor. It also didn’t need to form a partnership with a major deal a day site. In the end, vendors and/or partners will inevitably squeeze tighter, he says.

As a standalone site, Deal Chicken can also establish its own pricing, which has been ambitiously set at 50 percent of the deal price, minus 2.25 percent for processing. That’s definitely at the high end of the deal a day range, which is typically 30-50 percent. But still, it is a relative bargain compared to other local media offerings. Rapid payment is also promised: 30 percent within five days, and the remaining 70 percent within 30 days.

Ultimately, Republic’s independent position is a brave one. Other newspaper companies have settled on partners to ensure that deal a day didn’t get in the lost in the shuffle of day to day operations, or sometimes, in acknowledgment that leading deal a day companies have successfully established a local beachhead.

But Coleman says that when you get past the credit card processing, daily deals are actually among the simplest of the 30 products the company produces. Republic is also ideally poised to push every button it has to make deal a day a success, he notes.

In addition to newspaper and website promotion, Deal Chicken is being promoted for five to ten seconds on the noon news show of KPNX-TV, the local Gannett NBC affiliate. The needle moves a lot after every on-air mention, he says.