ADOTAS – LivingSocial has come up with one of the craziest deals you will see online, possibly ever. Maybe that’s an overstatement but the company has partnered with Amazon.com to basically give away free money to its customers. For $10, you can get a $20 Amazon.com gift card…. What’s more is if three friends buy the card, yours is free.
You may have gotten an email from a friend, co-worker or loved one about it. You likely saw your friends on Facebook post about it. The deal has sent online consumers into a flurry and by the time I woke up this morning and bought my very own gift card with 30 minutes left in the deal, over 1.3 million cards had been purchased. This definitely put LivingSocial into the headlines (note the 80 articles already discussing the deal) and forever on the map as a formative competitor to market leader, Groupon.
Why would Amazon.com take such a hit? Especially since LivingSocial takes a 30% share? Many have asked the question and the answer is, the company has a $175 million investment in LivingSocial. For them, it’s a small price to pay for new users and publicity.