/// Amazon Taps LivingSocial to Enter Daily Deals Space — For Now

June 24, 2011  |  All Things Digital

Amazon has begun its steady march into the daily deals business, by tapping the expertise of LivingSocial, the second-largest provider in the space behind Groupon. AmazonLocal first went live in Boise, Idaho, on June 2, and then followed up yesterday, by launching in its hometown of Seattle and three of neighboring suburbs, Tacoma, Bellevue and Snohomish County. For now, Amazon says, the deals are all sourced by Washington, D.C.-based LivingSocial, but that will change over time. “AmazonLocal will soon offer direct deals sourced by Amazon,” a spokesperson confirmed. Amazon invested $175 million in LivingSocial in December, timed perfectly with acquisition talks between Google and Groupon falling apart. The roll-out of AmazonLocal is not the first time we’ve seen Amazon experiment in the deals space. For $25 off a Kindle, Amazon will subsidize the hardware by serving ads on the e-reader’s screen . Instead of typical ads, a lot of them were a lot like offers, such as a $20 Amazon gift card for $10; $6 for six Audible books (normally $68); $1 for an album from Amazon MP3 Store and $10 for $30 of products in Amazon’s Demin Shop. Eventually, you can imagine the two initiatives merging to create a different offering from Groupon. For instance, Amazon may try to go after a much more tailored approach. Today, the daily deals that are sent to our inbox are not very personal — a man will receive an offer for a manicure and a woman could receive a discount for a barbershop. Both Groupon and LivingSocial are trying to become more relevant by delivering better offers using your location. But Amazon’s approach could be based on your purchasing history. Already it’s experimenting with this by allowing Kindle users to dictate the kind of ads they will see by placing votes on a system Amazon calls the  AdMash . While details are fuzzy, I see a bigger correlation with what Google is doing in the space with Google Wallet, which is supported by local coupons and other offers that may be of interest to the user, than what Groupon is doing. Retailing and merchandising is in Amazon’s DNA more than advertising. Regardless of the future, Amazon’s first day in a large market clearly demonstrated its access to a very large population

Amazon Taps LivingSocial to Enter Daily Deals Space — For Now

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