Groupon Is Eating Competitor

While we don’t have access to the internal financial documents of companies in the local/group coupon-buying space — one of the hottest verticals to emerge in 2010 — we can tell by looking at site traffic that Groupon exponentially outstrips its nearest competitors, LivingSocial and BuyWithMe.

These companies have spent a fair amount of time in the headlines lately, especially given recent rumors of a Google acquisition for Groupon. And LivingSocial just picked up a huge round of funding from Amazon, as well.

But according to traffic stats — and admittedly, there’s not an exact correlation between traffic and traditional factors of profitability — LivingSocial saw a boost over the summer that never turned into the hockey stick graph most companies like to see as an indicator of early, rapid growth. Rather, traffic briefly held steady then began to dwindle. Currently, LivingSocial sees about as much traffic as Groupon did this time one year ago.

Groupon, on the other hand, saw a dip in traffic in September, but it’s otherwise been on a steep incline since the beginning of 2010.

LivingSocial reports a userbase of 10 million to Groupon’s 12 million; by that metric, the companies aren’t that far apart. But again, startup-reported user metrics can create a deliberately hazy view of a company’s overall health.

A Google acquisition for Groupon could spell further trouble for LivingSocial, too. The former company’s ad spend would decrease by about $1 million per month, as its Google-placed ads would be free.

via mashable.com

SEOmEU