LivingSocial Valued at $2 Billion

LivingSocial, the second-largest website devoted to daily coupons, is close to raising as much as $400 million in funding that would value the company at more than $2 billion, Bloomberg reports.

LivingSocial, which is three years old, said in December that it was booking $1 million a day of revenue on average and was on track to generate more than $500 million in revenue in 2011. The company says it now serves 24 million subscribers in 230 markets in 12 countries.

LivingSocial illustrates the increasingly blurred lines between the formerly separate disciplines of "advertising" and "promotions and coupons" and "retailing" and "commerce." Lots of small and local businesses have embraced LivingSocial and Groupon for a simple and practical reason.

Advertising gets bought in advance of any buyer activity. But when using a group shopping service, the "advertiser" pays only when a customer actually buys something. It isn't clear whether such promotional activity has any measurable impact on company branding and image. What is clear is that retailers like the economics of the service.

They pay only when a purchase occurs, can control the amount of money they want to spend on any single promotion, and essentially get free promotion for users who do not decide to redeem a coupon, but "see" the offer.

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LivingSocial Is Said to Seek Funding Valuing Daily-Deal Site at $2 Billion - Bloomberg