Even a few months ago, LivingSocial seemed like the definition of an also-ran: Groupon got PR, small group-buying competitors got PR, and when those small companies got written up, LivingSocial could hope that the phrase “Like Groupon and LivingSocial” would appear somewhere in the copy.
But they’ve recently been recognized as a player in their own right. A few recent updates:
- An internal survey shows a high level of customer satisfaction at LivingSocial.
- LivingSocial has just purchased Ticket Monster, a Korean daily deal site with $24 million in monthly revenue.
- Amazon’s group-buying initiative uses LivingSocial’s sales force for now.
The last one is a little surprising. Amazon is a major investor in LivingSocial, and they’re rolling out what looks like a competing service, but using LivingSocial employees to support the rollout. One possibility is that this presages a longer-term cooperation between LivingSocial and Amazon. More likely, Amazon will focus on what they do best (highly customized deals for individual buyers, and great logistics).
Internet Explorer Still in Decline
Firefox and Chrome together now have 50%+ market share. If, as has been claimed in the past, IE is a big factor in Bing’s popularity, this is a bad sign for Microsoft. On the other hand, it’s impressive that they’ve been able to maintain and grow Bing’s market share with these headwinds.
Affiliate Site Bans a Swathe of Copywriting Best Practices
ClickBank, a site that handles transactions for affiliates, has updated their promotional guidelines. They’ve banned false scarcity (“Only 300 copies!”) and discounts from a price at which a product was never actually sold.
ClickBank is free to operate as they see fit, but most of these techniques are on display at department stores around the country. It would be an interesting overreacting if the FTC made the Internet a harder place to run ads, because they’re easier to track.
Using Mechanical Turk to Dodge Panda
The whole point of Google’s Panda Update was to cut back on scalable content strategies: to make sure that a site required writers to labor over the content, instead of mass-outsourcing cheap text. Which is why it’s delightfully ironic that Graywolf was able to use Mechanical Turk to avoid Panda penalties. It’s a special case, of course, but it illustrates the typical search engine versus SEO arms race.
Amazon’s App Store Criticized
App developer Shifty Jelly is seriously annoyed with Amazon’s app store, based on a fairly anti-developer change in policy—Amazon originally planned on offering certain apps for free, but paying their developers a commission on the free apps, but then rescinded the part about paying.
It’s unfortunate, because the app store is a smart experiment: Amazon is in charge of pricing, so they can use their incredible merchandising experience to build a profit-maximizing machine. And with the typical app store gross margins (100%, basically), that would be very profitable, indeed.
Ning for Sale
Paid social network Ning is up for sale at a disappointing $150mm price tag, barely higher than their total VC funding from the last few years. One of the prospective buyers is GoDaddy, a company whose core competency is the upsell. On a premium-only site, that could be a great combination.
Link Buying Isn’t Dead Yet
Text-Link-Ads, one of the most popular link-buying services, is currently pushing a new ‘link wheel’ service. This appears to be a twist on typical link-buying, in which the links look a bit more organic but still face the same direction.
They’ve helpfully diagrammed just what this pattern looks like; surely, Google’s anti-spam team is taking note.
DST Invests $50mm in ZocDoc
DST has invested a comparatively small round—they’re more the nine-figure type—in Zocdoc, the “OpenTable for doctors”. The business model is smart and scalable, and the potential market is huge. As Epocrates has demonstrated, getting a software product into doctors’ offices is a great way to show them some very high-CPM ads.
(Digital Due Diligence has done some research into how ZocDoc got so large, and the implications thereof for their investors and competitors. Contact us for details.)
Twitter’s Staggering Ad Renewal Rate
eMarketer claims that 80% of Twitter advertisers renew their campaigns. This number will decline in the future, as they aim for smaller and smaller advertisers, but it’s still an amazing performance.
Graphing New York’s VC Scene, 2005 to Present
Investor Jerry Neumann has created an amazing graph of VC activity in New York. It’s sortable by deal type and firm type, and presents a useful macro view. From about mid-2009 to present, it’s been a very good time to raise capital in New York.
Related: Chris Dixon writes about what the NYC startup world needs (and doesn’t need). The first point is crucial: New York needs the kind of massive IPO / acquisition that can spawn a couple dozen angels/VCs/founders who all know each other pretty well and think pretty much alike. A monoculture is dangerous, but it’s also the only way companies can scale up their workforce without diluting their culture.
The Story Behind Yahoo Sports
Anyone who gets bored of waiting for AOL to transform itself into a media company should take a look a Yahoo instead. This amazing piece covers how Yahoo ended up dominating the sports news space online, starting with useful products and then building out unparalleled content.
The Daily Deal M&A Market
The daily deal industry as it’s currently understood is about two years old. It’s already generated enough M&A activity for someone to create a report about it. 36 of the 451 companies tracked have been bought out so far.
Mobile Ads Aren’t Paying Off (Yet)
A new survey shows that among advertisers who don’t raise their mobile spend, ROI is the most common reason. Amusingly, the second most common reason is “No impact, or little impact on revenue,” which should be synonymous with ROI as long as CPMs aren’t $0.
Digital Due Diligence Weekly