LivingSocial, the parent site for six user review services including ReadingSocial, TuneSocial, and ReelSocial, is announcing two things today: First, a $5 million round of venture funding, which will be used to expand the business. And second, an interesting new strategic twist for the company: a destination Web site. LivingSocial has, to date, relied almost exclusively on its social-network apps and widgets for traffic, so this is a departure.
There's no doubt that Facebook and other social networks have served LivingSocial well: The company's services have 6.4 million users so far, who have posted over 8 million reviews. But building a business that's beholden to the social-network platforms does have its downsides.
Chief among them is discoverability. LivingSocial is building a database of reviews, and the potential user base for those reviews eclipses the social networks. Burying content inside social networks also doesn't do great things for search engine optimization. So all content now contributed to the services via social networks will also get presence on the LivingSocial destination sites, which Google and other search engines will be able to index more easily.
I expect more social-network app expansion plans that don't rely exclusively on the social nets. LivingSocial CEO Tim O'Shaughnessy said, "We think we'll be larger, more successful, and provide a better experience if we have both."
It makes sense for LivingSocial since the service uses the social networks as interfaces into a parallel network of its own users and their content. When you review a product on a LivingSocial site, it's shared with all LivingSocial users, no matter what network they're on, as long as they've installed the app. (The service uses OpenSocial as its platform for distributing its interface to non-Facebook sites.)
But this plan makes sense for other services, too. Social-network platforms expose apps to a lot of users, but the open Web has its own benefits. Especially since data can transcend platform, the smart developer should plan to build apps for as many of them as possible.