Daily deals sites make deal – Gilt City acquires BuyWithMe:
Are more daily deals sites going to consolidate?
News hit the net today that GiltCity.com run by the luxury online retailer Gilt Groupe will be acquiring BuyWithMe.com (no confirmation from either company yet). The supposed deal includes all of the assets from BuyWithMe such as users, vendor deals and related digital infrastructure. As the daily deals sector expands, we expected some consolidation due to the difficulties in scaling deals and the need to utilize large sales teams to acquire new vendors.
Groupon and Living Social have been leaders in the space and other companies such as DealsNews.com (which has a formidable slogan “where everyday is Black Friday”) are getting more popular although no one knows how profitable daily deals sites will become. Groupon is set to offer shares to the public soon and analysts are expecting a good run up short term but questions remain about the firm’s ability to generate revenue. The daily deals phenomenon is still alive at the moment and more consolidation may be necessary before investors begin to feel the deals are worth it.