Groupon Trending Down Heading into 2015

Snapdeal Acquires Wishpicker

Mophie Lawsuit vs LivingSocial Invalidated

LivingSocial Reaches the 5000 Employee Mark

Show me the jobs

livingSocial logoI love reports like this; fresh and inspirational. Many of you who follow my posts know that I not only do I follow the daily deal industry; I am also a huge fan when it comes to job creation. Sources show that Groupon employs just over 10,000 workers. During the ’60 Minutes’ interview that number was re-iterated along with the fact that the company adds about 150 people a week. It is interesting that 70% of those employed are overseas. So what about the number 2 daily dealer, LivingSocial?

Yesterday, during a recent chat between Erick Shonfeld of TechCrunch and Tim O’Shaughnessy, CEO of LivingSocial it was mentioned that “the company is now at 5,000 employees worldwide, with “just under half” in the U.S.” O’Shaughnessy wasn’t willing to reveal LivingSocial’s revenues as the company is still private. He did say that “we’ve grown very significantly in the last 12 months. We entered 2011 with 3 countries, now we are at more than 20, with 60 million members worldwide, and just around 5,000 employees worldwide. We have been able to aggressively grow the business.”

The ongoing debate of growth and or sustainability

The recent Daily Deal Media study estimated that globally, over 1340 daily dealers closed their virtual doors in the last 6 months alone.  ”A lot of people started to scale and started to realize they didn’t have all the pieces needed to make it work,” says O’Shaughnessy. This again begs the question is the entire industry’s momentum over? The argument is that the daily deal industry was born in the worst recession since the Great Depression. Now there is deal fatigue, and the economy isn’t in as dire straights. Apparently O’Shaughnessy doesn’t see it that way. “The business is not predicated on being in a recessionary cycle,” he argues, pointing to its success in countries like Brazil whose economies are doing well.

A recent comScore model shows that visitors to LivingSocial’s site peaked last June at 11.2 million worldwide. In December it was down to 4.4 million. Groupon also peaked in June at 14.4 million worldwide then fell below the 12 million mark in September. However, Groupon’s number has been growing steadily since September and was back up to 12.5 million unique visitors in December.

Changes in the future

Tim states the obvious that “everybody knows that a lot of marketing has gone into this space. Guess what? When you click on an ad and you are taken to a page, that is traffic. Once you get enough users, if you stop doing some of that marketing, you will have a significant drop in traffic.” The daily deal companies were spending massive dollars to increase traffic.

LivingSocial has scaled back and is now focused on those 60 million users the company already has a relationship with. The comScore numbers don’t measure mobile, which is “an incredibly meaningful percentage of interaction,” notes O’Shaughnessy. He believes that the daily deal industry as it exists today is just an entry point for local commerce. That being the case, it would only stand to reason that O’Shaughnessy and other leaders in the daily dealing industry are already working towards up-grading the space as we know it.

It sounds to me as though we may see a morphing in the not to distant future. It’s still too early to call whether these changes will create more jobs, or just restructure those that already exist.

Source: TechCrunch
 

Don Young

Don Young, Jr. is a beat writer for Daily Deal Media, the number one resource for the Daily Deal Industry. Don has spent over a decade as a stock broker / advisor focusing on fundamental and technical analysis. Prior to that he was the sole proprietor of The Tile Guy , based in Portland,Or. completing multitudes of both residential and commercial projects in the Pacific Northwest. Don enjoys researching new businesses , market forecasting, traveling, cooking, volleyball , golf and relaxing with family and friends.
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