LivingSocial sells $20m in discounted Amazon cards

Posted by Mike Luttrell

In the span of less than 24 hours, more than $26 million has been snatched up in Amazon.com gift cards, courtesy of a leading online coupon destination.

Before yesterday, a lot of people had never heard of LivingSocial. But then they saw their friends talking about it on Facebook, people Tweeting the deal, and seeing it posted on online news sites - LivingSocial was offering $20 Amazon gift cards for $10 a pop. No limit.

Now, just one day after the deal went live it has sold more than 1.3 million of the cards. The New York Times believes the company is losing money on the deal. But, it surmises, it's less than it would have had to spend on a giant marketing campaign.

It really highlights just how the world of advertising is changing in this social networking society. Getting people to actually research and learn about LivingSocial became the thing to do yesterday. People were flocking to the new site in droves. Could a TV commercial do that? Could an online ad campaign do that? Nope. All it needed to do was make the deal available and rely on its existing userbase to spread the word. Easy as pie.

LivingSocial is a Washington, DC-based firm that usually just aggregates deal information that is already available. Yesterday's move was different. It was fulfilling the deal itself.

But what's a few million dollars when you get people to be instantly intrigued by your site, and have a good shot at retaining them as a future visitor? Well played, LivingSocial. Well played.