* Exec eyes combination of location data, instant deals
* Company has sold over 100,000 instant offers so far
* Tippr CEO: location-based instant deals may not catch on
By Alistair Barr
SAN FRANCISCO, July 28 LivingSocial Chief
Executive Tim O'Shaughnessy said mobile technology may be a
"gamer-changer" for the daily deal industry, although he was
cautious about how successful the company may be in this area.
"There's great potential in this space. We're investing a
lot in it," O'Shaughnessy told Reuters this week. "Whether we
get it right remains to be seen."
The daily deal industry, which offers big online discounts
from local businesses, has exploded in the past year. Groupon
Inc, the largest company in the space, filed for a $750 million
initial public offering earlier this year. LivingSocial, part
owned by Amazon.com (AMZN.O), is also planning to go public.
Most daily offers are currently sent to subscribers via
email. However, the boom in smartphones means more deals may be
distributed instantly based on people's locations.
Earlier this month, LivingSocial and other daily deal
companies including Gilt City and BuyWithMe, partnered with
social network Foursquare, which has more than 10 million
members willing to share their locations.
The partnership lets LivingSocial distribute its daily deals
to Foursquare users.
However, LivingSocial also runs instant deals, which are
much quicker offers focused on smaller areas, currently in parts
of New York City, Washington, D.C., and San Francisco.
The combination of instant deals and real-time location
information from mobile phones "is a potential game-changing
opportunity," O'Shaughnessy said. "It solves a problem for
consumers and merchants in a different way to daily deals."
Local merchants such as restaurants will be able to fill
empty seats quickly by turning on instant deals that reach
consumers' close by through their phones, he explained.
This approach will work best in urban areas where there is a
high concentration of businesses and people. In midtown Manhattan,
LivingSocial has signed up about 160 merchants for its instant
"We're driving substantive amounts of business to all sorts
of merchants," O'Shaughnessy said. "We're live in three markets
and have sold about 100,000 instant deals at this point."
Still, Martin Tobias, chief executive of Tippr, which runs
a daily deal software platform that helps other companies
compete with Groupon and LivingSocial, reckons location-based
instant deals may not catch on.
It will be difficult to source enough discount deals to
make this approach work in lots of areas, he argued in an
interview with Reuters on Thursday.
Consumers may not be that interested in such offers, he
"On our network Thursday is the biggest day for deals
because people are planning for the weekend," Tobias said. "Few
people are searching for something right now. If they are
walking around, they're probably already heading somewhere to
do something and may not be want to be diverted."
Still, the Tippr CEO said mobile technology is crucial for
the daily deal industry in another way.
Of all the deals offered through Tippr's platform, 42
percent of them are opened on a mobile phone, he noted.
"That's a giant number," Tobias said. "If you don't have a
purchase experience that's optimized for mobile buying you're
going to miss a lot of sales."
(Reporting by Alistair Barr; Editing by Phil Berlowitz)