LivingSocial has abandoned its location-based “Instant” deals service before it ever made its mark. In addition, company co-founder and former president Eddie Frederick has left the site, and it’s assumed that his departure was not by choice. Frederick likely had an active hand in developing the Instant platform, which has been described as essentially being dead on arrival. Internet success isn’t as easy as it looks.
LivingSocial is the #2 deal website, behind Groupon, but it hasn’t managed to successfully turn itself into anything other than “another Groupon.” The Instant site was supposed to be something that could differentiate itself in the marketplace. However, while Groupon is an Internet success story on the scale of Facebook and YouTube, LivingSocial is just keeping its head above water for now.
In fact, last year it ended up with a $558 million net loss, with only $245 million actually collected in revenue. But there’s a lot of faith that the site can transform into something bigger. It has received more than $800 million in venture capital funding. Part of that was based on presentations LivingSocial made about Instant. These location-based deal services are all over the Web but few of them have become success stories. Now, LivingSocial Instant will be transformed into a local food and delivery service, another muddled market. We’ll see how that goes.