By Joseph Galante - Dec 2, 2010 2:44 PM PT Bloomberg
Amazon.com Inc. plans to make an investment in LivingSocial.com, a website that offers daily coupons to users, a person familiar with the matter said.
The investment may be announced as soon as today, said the person, who requested anonymity because the discussions are private.
Chief Executive Jeff Bezos is using part of Amazon’s $5.89 billion in cash to capitalize on the surging demand for online services that provide steep discounts on everything from hotel stays to spa visits. Google offered to buy Groupon.com, the biggest daily deal site, for $6 billion, two people familiar with the matter said Nov. 30. The approach has heightened interest in rivals such as LivingSocial.
“We see a tie-up between Amazon and LivingSocial as a smart strategic and financial move,” Marianne Wolk, an analyst at Susquehanna Financial Group in New York, said today in a note to clients.
LivingSocial, a startup based in Washington, is likely to generate sales of more than $500 million next year, Chief Executive Officer Tim O’Shaughnessy said in an interview last month. Groupon, also privately held, may reach that milestone this year, two people familiar with the matter have said.
Daily-deal sites offer discounts -- typically 50 percent -- from businesses such as restaurants and nail salons, then keep a portion of the sales. The promotions activate once enough people sign up for them. The barriers to start such a site are few; just about anyone with an e-mail list and a deal can do it.
They’re trying to get a piece of the local advertising market, which is set to reach $133 billion this year and is moving online and away from print, radio and direct mail, according to consulting firm BIA/Kelsey in Chantilly, Virginia.
Amazon, based in Seattle, slipped 2 cents to $176.53 at 4 p.m. New York time in Nasdaq Stock Market trading.
To contact the reporter on this story: Joseph Galante in San Francisco at jgalante3@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
To Learn More Click Here
No comments:
Post a Comment