With that in mind -- and with the oft-repeated caveat that Groupon is in a market with hundreds of competitors and extremely low barriers to entry -- we're taking a look at the companies that could take Groupon's valuation from over $16.5 billion down to zero point zero.
With hundreds of millions of dollars in funding from Amazon
, LivingSocial is Groupon's most logical competitor from a strategy standpoint. Like Groupon, it offers a daily deal at a business establishment in the customer's neighborhood, offering a meal, a movie ticket or a service at a heavily discounted price. The customer then buys the deal and presents his or her voucher at the establishment to get the discount.
WHY IT COULD BANKRUPT GROUPON
: Amazon. Right now, LivingSocial gets about half as many unique viewers to its website as Groupon, according to Compete's site analytics
; if Amazon were to leverage its Rolodex and its bank account and meaningfully integrate LivingSocial into its own website, it could leapfrog Groupon and render it a mere also-ran in the daily deals landscape.
For now, there is no indication that this full integration will happen, aside from Amazon's continued investment in LivingSocial. In June 2011, Amazon started a pilot program for a daily deals site called AmazonLocal
, which aggregated the best local discounts from around the web onto one website. No word on an exclusive Amazon/LivingSocial integration yet; it's all rumors for now
: In an email, a spokesperson for AmazonLocal describes AmazonLocal thus:
AmazonLocal is not an aggregator. LivingSocial just provides (a.k.a. "sources") the deals to AmazonLocal and AmazonLocal makes them available to their own customers.
LivingSocial provides the deals that AmazonLocal uses; however, the deals that can be bought by customers from LivingSocial and the deals that are bought by customers from AmazonLocal are not the same. They are not the same merchants, nor are they sold on the same day.