LivingSocial this morning announced the acquisition of Barcelona-based Let's Bonus, giving the company the overseas muscle it needs to try and keep up with larger rival Groupon's international expansion.
Let's Bonus offers Groupon-esque deals through 25 cities in Spain, Portugal, Italy, Mexico, and Argentina. Let's Bonus also offers travel-related deals, something that will also help LivingSocial keep up with travel deals publisher Travelzoo
LivingSocial is the distant silver medalist in this space. A report last month from Internet traffic watcher Hitwise indicated that Groupon is generating nearly 10 times the traffic of LivingSocial.
In short, if Groupon is worth billions, LivingSocial could be fairly valued in the hundreds of millions. In other words, Amazon's $175 million should have bought it a meatier stake in LivingSocial than we think.
Now that we're getting more metrics out of both Groupon and LivingSocial, we can begin to arrive at our own conclusions.
LivingSocial's press release this morning claims that it has "saved its more than 16 million subscribers more than $280 million" since its inception a couple of years ago. Groupon revealed in a press release earlier this week that it has more than 50 million registered users, saving them over $1.5 billion last year alone.
These are big numbers, but it should also smell like an opportunity for the companies diving into this model. Catching up to Groupon is unlikely, but sprinting past LivingSocial for second place is a realistic goal.
Travelzoo already reaches out to a base larger than LivingSocial with its weekly Top 20 email of travel deals, and momentum is building for the Groupon-like experiences it began discounting last year. OpenTable
It's been just three months since AOL
LivingSocial has to know that it's vulnerable. It can be caught from behind. This opens the door to rivals that have been dying to dive in as well as niche-specific players. LivingSocial better make sure this isn't the last deal it strikes in 2011. It needs sprinting lessons.
Should Amazon have bought all of LivingSocial, or is a stake enough to kick the tires? Share your thoughts in the comment box below.
The Knot and OpenTable are Motley Fool Rule Breakers recommendations. Amazon.com is a Motley Fool Stock Advisor pick. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
Longtime Fool contributor Rick Munarriz wonders if social coupons will be a passing craze or if thriftiness is forever. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.