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Groupon Living Social Purchase
Back when the economy was slowing down, local deal sites such as Groupon and Living Social were all the rage. In fact, these types of deals were so popular that companies like Amazon and Google got into the game for awhile as did local news stations and just about everyone else. They all quickly learned it was hard to make money doing it and one by one they exited.
Still, the biggest two sites Groupon and Living Social survived and lived on. Living Social was heavily invested in by Amazon, but that wasn’t enough to make the company soar. In fact, back in 2012 Amazon valued the company at over $1 Billion, whereas by the end of 2014 the valuation was only $242 million. A huge drop.
Following Groupon’s disappointing earnings announcement today where they announced a 3rd quarter loss of $38 million or 7 cents a share, the company also entered an agreement to buy Living Social. The purchase price wasn’t disclosed, but the company said it is “not material” which hints at a very low price.
You can find more details in this Wall Street Journal article. What are your thoughts? Will this consolidation be bad for the daily deal market or has that space already dried up?
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