LivingSocial Closes in on Groupon

Competitor generating as much revenue in March, report

By Marcus Riley
|  Friday, Mar 25, 2011  |  Updated 6:21 PM CDT
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This article was been updated since its original posting after Groupon alerted NBCChicago to an updated story from Tech Crunch, which questions the revenue report. Groupon, however, does not share financial data.

Call it Groupon fatigue?

Some reports indicated that Chicago company Groupon, the same one that's become so popular its name became a verb, is starting to show more signs of vulnerability amid increased competition.

Yipit.com, a daily deal aggregator that indexes offers from more than 400 services, reports that Groupon is down 32 percent in major North American cities in March -- which is bad enough -- but LivingSocial is up 59 percent over the same period, and is now generating as much revenue as Groupon.

CNN reports that with so many competitors in the field, consumers may be tiring of all the daily deals, and are choosing to boycott rather than buy.

Yipit lists several reasons for Groupon's declining market share, including the influx of competitors, the move toward offering multiple personalized deals every day, and Groupon's inability to attract customers outside of its 18-34 demographic.

It was widely reported that Groupon's U.S. revenue declined 30 percent in February, but TechCrunch disputes Yipit's method of calculating its figures, and reported that the company's revenue actually increased by $11 million from the previous month.  The report does not question exponential growth of Living Social, a Groupon competitor.

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