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Deal of the day: Groupon acquires Mob.ly

Localized daily deals site looking to beef up its mobile services

Financial trends and news by Chris Caceres
May 5, 2010
Short URL: http://vator.tv/n/f7a

The local deals space continues to heat up.  Groupon, a site which features daily deals based on a user's location, announced it has acquired Mob.ly, a mobile recommendation service.  Terms of the acquisition were not disclosed.

Along with the announcement, Chicago-based Groupon said it's opened up an office in Silicon Valley to "gain better access to the Bay Area's technology talent, with a focus on Groupon's mobile- and business-intelligence practices."

In case you're a little behind in this sector of online commerce, Groupon offers a daily deal for anything from restaurant, to a bar, to a massage, based on your location.  It uses social tools to try and attract many buyers for whatever the product may be.  If it can reach the certain amount of required buyers needed for a deal, Groupon gets a cut from the sales.  It claims to have saved consumers over $150 million.  

And it's business is prospering.  Currently, Groupon has around 90 employees and it's most recent news was that it raised a massive $135 million round at a $1.35 billion valuation led by Digital Sky Technologies, the same company that invested in Facebook and Zynga.  

Groupon wants to use Mob.ly to grow its mobile capabilities.  It said Mob.ly would act as the "core of Groupon's mobile team," which will be led by former Yahoo! Senior Director of Product Management Mihir Shah and Yishai Lerner, former Director of Engineering at Carrier IQ.  Mark Johnson, former VP of Software Engineering at Netflix will lead Groupon's business-intelligence practice.  The company already has a mobile application for the iPhone but is limited to finding and purchasing nearby deals and searching for those in different cities as well as redeeming coupons.  

Andrew Mason, Groupon's CEO commented in a release, with a bit of a sense of humor, "Now there is no excuse to not work for us […] and Chicago is still super cool. Did you know that we have the world’s largest water-filtration plant? Great city, can’t understand why people wouldn’t want to move here, but whatever—now we’re in the Valley too.”

Groupon may have a bit of cash to throw around and make acquisitions like these, but a quickly rising competitor startup, LivingSocial, recently raised $14 million for its similar localized daily deals platform.  LivingSocial is looking to expand its services into new cities and markets across the country.  On the other hand, Groupon looks like it's making some aggressive moves to beef up its mobile offerings.  

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