• by Erik Sass , Staff Writer @eriksass1, October 28, 2016

Remember that year when social commerce and daily deals was the next big thing?  I think it was like 2010 or 2011. Anyway, those days have long gone, judging by the general non-reaction to the merger of the two largest daily deal operators.

Indeed, if they had tried this five years ago it would have caused an uproar in the press, and who knows, maybe even an anti-trust investigation. But this week’s announcement from Groupon that it’s acquiring longtime rival LivingSocial was met with scarcely a murmur. Groupon didn’t disclose the deal amount but did reveal that it won’t have any “material impact” on its bottom line, suggesting the figure is rather small.

It’s telling that the acquisition is not really part of a growth strategy so much as a cost-cutting initiative: Groupon also revealed that it is further reducing its footprint by withdrawing from a dozen countries focus on core business in 15 markets over the next year. At its peak it was operating in 48 countries around the world. The company has already made a number of layoffs and shuttered some local operations over the last year. It’s currently valued at around $3 billion, down from $16.7 billion at its IPO in 2011.

For its part LivingSocial is a shadow of its former self, with just 200 employees, down from 4,000 in its heyday. Most of the reduction has fallen on local salespeople as consumer demand for daily deals plateaued, and many businesses grew leery of the big discounts involved.  Amazon, which poured $175 million into LivingSocial in 2010, contributing to a valuation of around $6 billion in 2011, declared a $169 million loss on the investment in 2012.

For all that the daily deals marketplace is still kicking: Groupon expects total sales revenues of around $3.1 billion this year, on gross billings of around twice that figure. And Groupon still has plenty of believers: back in April it took a $250 million investment from Atairos, following Chinese e-commerce firm Alibaba’s purchase of a 5.6% stake in the company in February.