location based blog: REVEALED: Amazon's Secret Groupon-Killer Is Live, And It's Not What You'd Expect (AMZN)

Thursday, June 2, 2011

REVEALED: Amazon's Secret Groupon-Killer Is Live, And It's Not What You'd Expect (AMZN)

Amazon quietly rolled out a daily deals service in Boise, Idaho called Amazon Local, but thankfully TheNextWeb caught on.

At first, it looks like a straight daily deals site by Amazon in the mould of Groupon: the deal today is 50% off ice cream and shakes at a local store.

But it's not. The deal actually comes from LivingSocial, which counts Amazon among its big investors, and it seems that what Amazon Local is doing is actually aggregating deals from other companies. Right now it's just LivingSocial but there's no reason why it wouldn't include other players. There's also a sweetener for using Amazon Local in the form of Visa reward points.

This looks like an experiment by Amazon more than anything else at this point, but it's a smart one.

The daily deals market is huge and Amazon needs to be there. At the same time, it's a bit difficult to tackle. It requires a huge sales force and a presence in every state. It poses serious tax issues for Amazon. And daily deals are as much about advertising as they are about commerce, and does Amazon really want to tackle Google and Yelp and Foursquare in local advertising?

So the aggregation route, like investing in LivingSocial, is a smart way to get intelligence, relationships, and of course money, in a huge fast-growing space without having to go all-in.

We look forward to seeing whether/how Amazon rolls this out more widely. We're also curious what our friends at Yipit think about having Jeff Bezos as their new competitor.

amazon local boise