business news in context, analysis with attitude

The Washington Post reports this morning that online deals site Groupon is buying rival online deals site Living Social. Terms of the deal were not disclosed.

The story notes that Living Social was once hyped as being worth $6 billion, but lately the business has "sputtered," with the company having laid off more than half its workforce.

Groupon "has also been struggling," the story says, and this week "reported a loss of nearly $38 million on revenue of $720. 5 million in the quarter ending Sept. 30. Last year, Groupon said it would lay off more than 1,000 employees as it shuttered offices in six countries."
KC's View:
The daily deals business seems like a really good initial idea that did not have the foundation of a plausible, sustainable business model that would allow it to grow. I've used both Groupon and Living Social from time to time, but they did very little to nurture me as an ongoing customer and help connect me with the retailers in which I demonstrated any sort of interest.