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livingsocial, australia, dailydealmedia.comThe end of 2012 brought about a lot of change and uncertainty for LivingSocial, Groupon’s largest daily deal competitor. Though Groupon did see a rise in sales over the holiday season, LivingSocial experienced some setbacks. The question is, can they recover?

LivingSocial is a privately owned company so they are not responsible for sharing their financial records publicly, but Amazon, who holds 29% interest in the company, filed a report that stated a $650 million net loss in 2012.

With such a tremendous growth rate that both Groupon and LivingSocial enjoyed, there were bound to be setbacks along the way as they made the transition to large, mature companies. LivingSocial attributes the losses to failed acquisitions, including daily deal sites like Ensogo, DealKeren and GoNabit. These losses have resulted in LivingSocial investors like JP Morgan and Amazon taking some big hits.

In November 2012 LivingSocial announced the layoff of 400 employees with more layoffs expected through the holidays. Most of these cuts were made from the home offices in Washington, D.C. After a major hiring spree, shaving off 10% of their work force was a giant step backwards. The layoffs were more than likely a direct result of a 94% drop in revenues since Dec. 2011.   

With the market shifting so rapidly, it’s becoming increasingly difficult for these larger companies to stay nimble and move as quickly as they once had in the past.  That’s not to say that this spells the end of LivingSocial. CEO Tim O’Shaungessy has a growth strategy for 2013 with intentions of hiring employees in multiple areas, and he’s recently been cited tossing around words like “profitability”.

Source: WSJ

Tracy Rose

Tracy Rose is a staff writer at Mogul Media, contributing to Daily Deal Media and Digital MI, among other sites. Her published articles appear on a variety of websites, including Natural News, Plural Magazine, Suite 101, DECORative, Viewpoints and The Athletic Build, just to name a few. When she's not buried in research or pounding away at the keyboard, she enjoys powerlifting. Tracy is a Michigan state-record holder in deadlifting, having consecutively set records over the past three years. She can be reached at
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