Groupon Inc (GRPN) Rallies After Departure of CEO

Amazon tries to compete

The top competitor for Groupon, Living Social, experienced a $650 million loss last year. In fact, analysts noted that Amazon.com, Inc. (NASDAQ:AMZN) took a serious dent (to the tune of $274 million) due to its investment in the daily deal site.

Instead of buying Living Social outright, Amazon choose to initiate its own service. Amazon Local works with local businesses to provide deals to consumers. Instead of directly competing with Groupon Inc (NASDAQ:GRPN), Amazon.com, Inc. (NASDAQ:AMZN) is using Local to help transition into partnering with local businesses to provide delivery of local items to customers. These partnerships will also allow Amazon to provide same-day delivery for its products.

Of all three companies, Amazon.com, Inc. (NASDAQ:AMZN) is still the clear winner, with $16.07 billion in revenue for its first quarter. But with a drop in profits from $130 million in the first quarter of 2012 to $82 million in the first quarter of 2013, it’s clear Amazon needs a jump-start to put it above Groupon and Google Inc (NASDAQ:GOOG), especially as Groupon Inc (NASDAQ:GRPN) continues to gain ground.

Stephanie Faris has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Google. The Motley Fool owns shares of Amazon.com, Inc. (NASDAQ:AMZN) and Google Inc (NASDAQ:GOOG).

The article Groupon Rallies After Departure of CEO originally appeared on Fool.com.

Stephanie is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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