Ship naming and launching

Groupon responds to LivingSocial swipe

July 29, 2011: 3:12 PM ET

Groupon CEO Andrew Mason

FORTUNE -- At Fortune's Brainstorm Tech conference, LivingSocial CEO Tim O'Shaughnessy had some choice words for Groupon in which he accused the daily deals competitor of copying several of his company's recent efforts, including LivingSocial Instant, a service offering near-real-time deals that may only last one or two hours.

We ran an edited version of his comments earlier this week.

"So we launched LivingSocial Instant, and Groupon launched their clone of that later [Groupon Now]," O'Shaughnessy said. "We launched LivingSocial Escapes; they just launched Getaways, their clone of that, following that. ... We launched LivingSocial Instant and we launched LivingSocial Escapes, and they've since launched -- subsequently launched -- competing products."

Readers chimed in with their own thoughts afterwards (one Twitter user: "Pot, kettle?"), and O'Shaughnessy's comments caught the eye of Groupon itself.

"Focusing only on the instant deals and travel features ignores a long list of innovations in which Groupon has led the industry, including various partnerships and other projects," a Groupon spokesperson told us.

To boot, Fortune was pointed to several Groupon-exclusive partnerships with Live Nation, Yahoo, and Ebay as well as several daily deal "firsts" initiated by company, including the industry's first ever national deal (with Gap) last August,  "deal personalization" -- user targeting based on gender, zip code, and purchase history -- and advertising of merchant deals via banners, ad copy and landing pages.

The escalating competition comes during a particularly heated moment for both daily deals sites. Groupon recently filed for an IPO and is under scrutiny from the U.S. Securities and Exchange Commission (SEC)  for using an unusual measure in its S-1 filing, "adjusted consolidated segment operating income" (or adjusted CSOI), to measure profits without including its online marketing expenses. Meanwhile, LivingSocial just reportedly picked a team of underwriters for its own public offering.

Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.