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Amazon Stakes 'Local' Claim

Likely preempting Google grabbing Groupon, Amazon has taken a $175 million stake in rival deal site LivingSocial.

As TechCrunch notes, "This comes at an interesting time for both companies, amidst even more rumors that competitors Google and Groupon will hook up to the tune of $5.3 billion in the coming weeks."

Under the headline, "Amazon Deal Shows 'Local' Is New E-commerce Buzz," The Wall Street Journal writes: "Behind the [acquisition] activity is a wider renaissance in e-commerce, which for years had developed little beyond the auction system pioneered by eBay and the one-click-in-your-pajamas shopping experience perfected by Amazon."

Taking a slightly different approach to the local deal space, eBay on Thursday confirmed the acquisition of local shopping search engine Milo.com for a reported $75 million.

"Of course the question we're all asking is whether social buying is the next big play in our 2.0 world or is it tulipesque hysteria," notes, Bill Tancer, General Manager of Global Research at Hitwise.

According to Hitwise, Groupon commands 79% of U.S. visits to the group-buying category, while LivingSocial comes in a distant second with 8% of the market.

"Probably the most interesting difference is the percentage of Young Cosmopolitans ... that are frequenting LivingSocial," adds Tancer. "From prior analysis we know that Young Cosmos are one the strongest early adopter segments ... Perhaps Amazon is recognizing the potential for LivingSocial to move beyond its current early adopter phase."

Writes Fast Company: "Amazon must be seeing something beyond what's in the traffic data -- or just want some piece of the social buying action."

Meanwhile, sources tell BoomTown that LivingSocial is actually hoping that Google will buy Groupon. Why? "Well, even though Groupoogle or Goopon are fun to say, the inevitable regulatory review could drag on, resulting in a slowing down of innovation in the bigger Google culture and the distinct possibility of newly rich Groupon execs flying the coop (in private planes)."

Read the whole story at TechCrunch »

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