LivingSocial's O'Shaughnessy: We 'Want to Be the Biggest Player in Local Commerce'

Thanks to Amazon, LivingSocial's CEO Tim O'Shaughnessy has the money and resources to make a run at Groupon's deal-of-the-day throne. Read on to find out precisely how he plans on doing it.

LivingSocial CEO Tim O’Shaughnessy, whose company received a $183 million investment from e-commerce giant Amazon.com late last week, announced that his daily-deals startup will use the funds to outpace Chicago-based frontrunner Groupon, which recently refused Google’s $6 billion purchase offer.

“If you want to be the biggest player in local commerce, having an investor that’s the biggest player in e-commerce seemed like a really smart thing to do.”

O’Shaughnessy noted the disparity in current market share between the two companies, and said that Amazon’s investment only enhances LivingSocial’s arsenal.

“Having a $183 million investment is an important part of making sure we’re not bringing a knife to a gunfight.”

Staff at Washington-based LivingSocial will be increased to a reported 1,800 with an aim to expand its deal-of-the-day service to more than 300 cities, a move that should help LivingSocial close a significant gap in deal-of-the-day traffic. A recent study reports that Groupon receives an average of 79 percent of group-based coupon traffic, while LivingSocial records just eight percent over the same period.

Aside from growing his company’s customer service base, O’Shaughnessy also said a significant portion of the investment resources will be directed at helping his clients, comprised of local businesses of all sizes, better manage their customer relationships.

“[We’ll] start to build a system where merchants can track their customers and can track who’s coming back and how valuable they are, and really give [our clients] more insights into their business.”

Product and service innovations like these that will help LivingSocial realize its goal of catching Groupon’s 35 million users and $500 million in revenue–numbers that O’Shaughnessy says LivingSocial will clear in 2011.