In the digital-coupon market, the number of daily deals and revenue each rose 9 percent overall in August compared with the previous month, according to Yipit, a daily-deals aggregator and market watcher.
Total revenue for the industry rose to an estimated $228 million, compared with about $209 million in July, Yipit reported. Groupon, the industry's much-hyped leader, increased revenue by 13 percent in August for a total of $120.7 million, up from $106.6 million in July. The Chicago-based company now commands 53 percent of the daily-deals market, up 2 percentage points, beating its closest competitor, Living Social (backed by Amazon). Last month, Living Social experienced a 3 percent revenue drop to $45.1 million, down from $46.4 million in July. It also saw its market share fall 2 percentage points to 20 percent.
Meanwhile, Google whichearlier this year, is showing signs of a slow start, according to Yipit. Revenue slid 23 percent from July and revenue per deal dropped by 37 percent. Still, it's important to note, Google Offers is only three months old. The industry is growing insanely fast and competitors are coming and going equally fast. Facebook and while Google is forging ahead, moving into five new metro areas and buying up daily-deal and digital-couponing companies.
On Thursday Google made its biggest bet yet on local commerce by snapping up Zagat, the highly regarded ratings and review guidebooks on restaurants, hotels, and other local destinations. The Mountain View, Calif.-based search giant apparently paid an estimated $125 million for Zagat. The goal? Killing the competitive likes of Groupon, Amazon, Living Social, AT&T, Facebook, and any other major consumer brands entering the fray. Google has deep enough pockets not to fret as much as the other players about its revenue share with local merchants or the price of its offers, which, Yipit reports, is below Groupon's and Living Social's, but it's growing, up 18 percent in August.
Expect the competitive jostling to continue as the overheated market evolves.