The buzz continues to build around group coupon/social buying phenomenon. First Google’s rumored offering of $6 billion for sector leader Groupon, and now, the Washington Post is reporting that Amazon is poised to make a $150 million dollar investment in competitor LivingSocial. According to the Post, this investment will put LivingSocial’s valuation at $1 billion. 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.
First a chart, the market share of visits to Groupon and its two nearest competitors, LivingSocial and Buy with Me:

Two observations. First, it appeared in Spring of this year, that Living Social’s visit growth would make it a viable threat to Groupon. As the chart denotes, that growth-spurt was very short lived. Second, if we look at the graph’s end-point, Living Social’s market-share is almost an order of magnitude lower than Groupon’s. So one-tenth of $6 billion dollars is less than Living Social’s projected valuation. Of course traffic to valuation is a gross over-simplification. Perhaps Living Social’s audience composition would validate a higher value.
Here’s a breakdown by Mosaic type comparing the audience of Groupon to Living Social:

The main difference between the two audiences, is that Groupon has clearly “crossed the chasm” in Geoffrey Moore speak, with strong showings in types like Mosaic type C02 – Prime Middle America. Probably the most interesting difference is the percentage of Young Cosmopolitans – type H01 that are frequenting LivingSocial. From prior analysis we know that Young Cosmos are one the strongest early adopter segments. Despite the very unimpressive traffic numbers, perhaps Amazon is recognizing the potential for LivingSocial to move beyond its current early adopter phase.