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LivingSocial taking on Groupon with the help of Amazon

Companies, Entrepreneurs, Media - Posted: January 29, 2011

Living Social Vs Groupon

28 year old Tim O'Shaughnessy founded LivingSocial in 2008 and although originally Facebook app developers, they soon moved into the online daily coupon industry. Social buying has gained notoriety over the past year with the huge coverage gained by LivingSocials rivals Groupon.

Groupon who recently turned down a $6billion offer from Google, has seen massive growth over the last 18months and Tim wants to see the same happen at Groupon.

Tim estimates that, together, the two companies own 98 percent of the market.

LivingSocial only moved into the market after acquiring a company called 'Buy a Friend a Drink.'

"We worked with beer, wine, and spirits companies and partnered with restaurants to give people coupons for free drinks," says Tim O'Shaughnessy.

Last week LivingSocial saw a huge spike in traffic. Why? Well it was due to e-commerce giant Amazon. Last month in a strategic move, Amazon invested $175million in LivingSocial in an effort to counteract a potential Google-Groupon combination. Last week, LivingSocial offered 50% off on Amazon.com, which led to 1 million Amazon vouchers being sold. It was the biggest group-buying deal in history.

They may still have a way to go to get to the level of Groupon but they are certainly one to watch out for and hope that last weeks traffic boost can help push them up a level.

They also have a Unique Selling point that will help them. Unlike Groupon, LivingSocial does not need a minimum number of people to purchase a coupon before the deal is activated. Instead it offers an incentive for its 85 million users to spread the word.

"When you buy the coupon, we sent you a custom link and if three people buy off your link, then your purchase is free," explains O'Shaughnessy

Everything You Need to Know to Start and Run a Successful Online Business

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Rishi Chowdhury

Co founder of YHP, founder of IncuBus Ventures, online marketing consultant & host of one of London's top entrepreneurial events (Flagons Den). Regularly found networking around Tech City, convincing myself I'm working. Working for the future, living for the moment.

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