February 1, 2012 / 8:10 PM / 6 years ago

LivingSocial lost $558 mln last year-Amazon filing

By Alistair Barr

SAN FRANCISCO, Feb 1 (Reuters) - LivingSocial, the second-largest daily deal company behind Groupon Inc (GRPN.O), had a big loss in 2011, according to new disclosures Wednesday from Amazon.com Inc (AMZN.O).

Amazon, the largest Internet retailer which invested in LivingSocial in late 2010, disclosed limited details of the daily deal company’s 2011 performance in its annual report filed with regulators.

LivingSocial generated $245 million in revenue last year, while incurring $686 million of operating expenses and $117 million of other costs, the filing said.

That left LivingSocial with a net loss of $558 million last year, according to Amazon.

A LivingSocial spokesman declined to comment.

The filing suggests LivingSocial was investing heavily to keep up with Groupon’s growth, particularly earlier in 2011. Groupon went public later in the year and was criticized for heavy marketing spending, which it quickly slashed.

The financial data disclosed on LivingSocial likely excludes results of businesses that the company acquired in 2011 but did not fully consolidate until later, such as LetsBonus in Europe, Ticket Monster in Asia and Jump On It in Australia.

Amazon valued its 31 percent stake in LivingSocial at $208 million at the end of 2011. That suggests a value of $671 million for the whole business.

Amazon used an equity-method valuation approach, which measures the book value of the company only. This takes into account current assets and liabilities, not the future value of the business.

Groupon shares rose 4.2 percent to $21.25 at mid-afternoon, valuing the company at more than $13 billion. Amazon fell 8.1 percent to $178.68 on Nasdaq.

(Reporting By Alistair Barr)

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