Today in Social

The Wall Street Journal, citing data from daily deal aggregator Yipit, says that nearly a third – 170 of 530 – of U.S. deal sites have shut down or been sold this year. And Google scooped up a German specialist, DailyDeal. Looking at Groupon’s public documents, the Journal shows customer acquisition costs going up, while sales forces expand. Groupon has 990 salespeople in the U.S. and LivingSocial 700, according to the Journal. Other types of social commerce may not require quite that much scale, though flash sales provider Gilt Groupe maintains warehouses and One Kings Lane just raised $40 million. So, though it may seem easy and cheap to get into social commerce in any single market, the only way to achieve anything resembling a network effect takes big investments.

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David Card

VP Research Gigaom Research

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