Amazon's Living Social Stake Sees Value Decline

The value of Amazon's
stake in LivingSocial fell in the second quarter, even though the daily-deals site reported 26% sequential revenue growth. The rising sales may be helping to validate demand for the online coupon business category. Deals rival Groupon's
shares are up 14% on the session, recovering from more than an 8% slide Thursday following poor results for social-related games-maker Zynga
and a negative Groupon reserach note from analyst Ken Sena at Evercore. Amazon's 29% stake in LivingSocial is now worth $271 million, down from $298 million in the first quarter, according to an SEC filing. LivingSocial total value is now $934.5 million, down from more than a $1 billion three months earlier. Revenue rose to $138 million. By comparison, it reported sales of $245 million for all of 2011, and a net loss of $558 million. The company is struggling with negative margins, however. LivingSocial reported a second-quarter loss of $93 million. It had earned $156 million in the prior quarter. LivingSocial cut more than a dozen employees this week, including three executives, in an effort to streamline and better compete with Groupon. The company said it had no immediate plans to file an IPO, in the wake of poot public debuts for Facebook
and Groupon. Facebook shares are down more than 35% from its IPO price in May; Groupon shares are down more than 60% since its debut late last year.
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