Should Amazon Be Worried About LivingSocial?

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Groupon (NASDAQ:GRPN) competitor LivingSocial is reportedly cutting staff and closing offices. Although the company insists it’s focused on restructuring to achieve profitability, some are worried, as the site closed the doors of its Seattle office a month ago and now is doing the same in New York.

Amazon.com (NASDAQ:AMZN) in particular should be paying attention, as the e-commerce giant invested $175 million in the daily deals site. In the fall, investors and Amazon executives received LivingSocial’s third-quarter earnings like a slap in the face, as it was immediately apparent that Amazon had overpaid for the site. The daily deals site’s net loss was $274 million for the third quarter of 2012. Amazon’s stock took a big hit after that news came in, as well.

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