LivingSocial CEO: We’re Set to Pass Groupon in 2011

Early last month we reported that LivingSocial had plans to use their $175 million Amazon investment in an effort to beat out Groupon for the number one spot in the daily deals industry. In fact in a Bloomberg interview, LivingSocial’s CEO, Tim O’Shaughnessy stated that the Amazon investment was an important part of making sure they weren’t bringing a knife to a gunfight.

Less than a week later Groupon announced that they would be seeking funding in what was thought to be an attempt to secure their number one spot from the possible grip of LivingSocial, now backed by its much bigger brother, Amazon. Less than a month later Groupon had raised $950 million in funding.

With their big bucks in tow we have watched as both Groupon and LivingSocial have rapidly expanded into new markets, filled key executive positions and acquired existing deals sites, all in effort to create a bigger global footprint.

While Groupon has continued to maintain a significant lead as the coupon giant, LivingSocial isn’t exactly little David armed with just a sling shot and last week they showed us just how formidable they can be. In a record breaking deal, LivingSocial sold 1.3 million Amazon Gift Cards, a $20 value for $10, in just 24 hours for over $13 million in sales. This far outpaced Groupon’s $11 million Gap record which sold 440,000 vouchers last August.

As if all of this isn’t all exciting enough, in a recent interview with CNET’s Daniel Terdiman, LivingSocial’s CEO, Tim O’Shaughnessy again iterated their intent to capture the number on spot in the US daily deals industry. When asked what he believed were the biggest challenges ahead, particularly when competing against an 800 lb. gorilla like Groupon, he replied, “We’re a pretty big gorilla ourselves. We’ve been taking U.S. market share pretty much every month for quite some time now and are on track to pass them in the U.S. in 2011. So we’re operating very, very effectively.”

While LivingSocial continues to be outspoken about their intent, Groupon has maintained a policy of not commenting on its competitors. And LivingSocial may be the least of Groupon’s worries at the moment. Last month they rebuffed an estimated $6 billion buyout offer from Google. Rumors were circulating that the search engine behemoth might not take too well to the rejection and that revenge might be on the horizon. Whatever the intent just last week word was out that Google was preparing to launch their own daily deals service called Google Offers.

The game is heating up big time and the last couple of months have shown us that things can change quickly. We have to wonder if Groupon can maintain their position and for how long. Can LivingSocial indeed overtake them to claim the top position? They have a ways to go but it does look like a possibility. Our thoughts on Groupon? In the immortal words of Shakespeare, “Uneasy lies the head that wears a crown”.