Groupon vs. LivingSocial: Which Coupon Site For You?

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Difference between Groupon and LivingSocial

"Deals-of-the-day"are fast becoming some of the most popular business opportunities on the Internet, and companies such as Groupon and LivingSocial are right at the forefront of this trend. What do these two have in common? Let's take a look!



Groupon is a website that offers various "deals-of-the-day" to several markets in the U.S., Canada, Brazil, and the U.K. The site first started in November of 2008, with the initial market serviced being in Chicago. Additional markets subsequently opened up in Boston, New York City and Toronto. By October of 2010, Groupon had over 150 markets in North America and more than 100 in Europe, Asia and South America. The company circa 2010 has 35 million users around the world.

LivingSocial is a social buying company based in Washington, D.C., although it is international in scope. The company also offers a variety of “daily deals”, which it offers to markets in the United States, Canada and Europe. As of September 2010, LivingSocial serves no less than 89 markets all over the world.


Groupon started out as a venture of Andrew Mason, who is currently the company’s CEO. Mason was able to persuade a former employer named Eric Lefkofsky to provide the $1 million startup capital for the company. As of 2010, Groupon has a projected revenue of $500 million. The present net worth of the company is currently valued at $1.35 billion. The company also has a number of international business concerns, many of which were acquired and branded under the Groupon name.

LivingSocial for its part first came to widespread public attention via the Facebook Visual Bookshelf application. This application was the first of its kind that enabled users to catalog and share favorite books with other Facebook contacts. Livingsocial later released applications such as PickYourFive and Polls, both of which proved to be massively popular among Facebook users. LivingSocial has since launched a daily deals set up similar to Groupon's, and this has proven to be the company’s highest earning venture yet.

Business Model

Groupon offers a single "Groupon" every day in each of its markets. These “Groupons” are basically assurance contracts that rely on the ThePoint's platform. The way it works is a deal becomes available to everyone after a certain number of sign-ups have been attained for that specific offer. If this number is not met, the deal does not go through for anyone. With this model, the potential risk for retailers is reduced considerably. Groupon for its part makes money from every retail sale.

LivingSocial also offers a single deal every day in a similar manner, in which members may be able to save as much as 50% off on restaurants, bars, spas, theaters, and other establishments. LivingSocial then essentially provides new customers to their members, with no upfront costs on their part. Just like Groupon, LivingSocial also takes a cut from the retail revenue.

Similarities and Differences


  • Offers various "deals-of-the-day" to several markets in the U.S., Canada, Brazil, and the U.K
  • Offers a single "Groupon" every day in each of its markets


  • A social buying company based in Washington, D.C.
  • Notable for the Visual Bookshelf application that enabled users to share favorite books with other Facebook contacts


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