Deals’ wars grow
Groupon CEO Andrew Mason, who recently has taken aim at such rivals as LivingSocial and Google Offers, may want to hold his fire.
Facing a barrage of criticism over Groupon’s pending IPO and rumors of a cash shortage, Mason penned a pugnacious e-mail in August claiming that the deals site was pulling away from the rest of the pack.
But the latest sales figures suggest the competition is coming on strong. His closest rival, LivingSocial, topped Groupon’s growth last month while even distant rivals are showing impressive gains, according to Yipit, a daily deals aggregator and researcher.
Thanks to a national deal with Whole Foods, Living Social sold $10 million in gift certificates and recorded $59.3 million in sales in September, a 32 percent jump from the previous month.
Even without the Whole Foods promotion, Living Social would have topped Groupon’s September growth, Yipit CEO David Sinsky said.
Living Social is still much smaller with $150 million in third-quarter revenue, compared with Groupon’s $400 million haul, Sinsky said.
Groupon also increased month-over-month revenue, which climbed 6 percent to $143.4 million, along with the rest of the daily deals pace that reached new highs.
In all, there were $266 million worth of deals sold in September, up 12 percent from August, when the industry took in $237.8 million, said Yipit, which only tracks deals in North America. Yipit counts how much money the deals generate and not the amount the deal companies keep after their split with merchants.
Other rivals also are growing quickly, especially Google Offers, which had a revenue increase of 233 percent. Google is still a minor player with about $500,000 worth of deals in September.
One big advantage for Living Social is that it is taking the slow lane to an initial public offering and has not had to open its books like Groupon, which is facing concerns that its torrid growth is slowing.
On Friday, Groupon filed its fifth S-1 since announcing its intentions to go public in June. It has had to amend the registration statement an embarrassing number of times after running afoul of regulators.
In the latest filing, Groupon had to include the full text of an internal e-mail from Mason that hyped his company.
Mason said in his e-mail that the company’s market depends so much on marketing because it works and that at some point it will reduce that spending and cruise on its existing customer base.

