Amazon.com startup to connect smartphone users

Online retail powerhouse Amazon.com pumped $175 million into LivingSocial, a fast-growing startup that connects smartphone users with shopping bargains.

The news came as the internet hummed with speculation that Google was on the cusp of a multi-billion-dollar deal to buy LivingSocial competitor Groupon, a Chicago-based deal-of-the-day service.

LivingSocial said it also got an $8 million investment from Lightspeed Venture Partners and that the overall infusion of cash will be used to “maintain a steady drumbeat of worldwide launches” and business growth.

“To be the biggest player in the local commerce space, there is no one better to work with than Amazon,” said LivingSocial chief executive officer Tim O’Shaughnessy.

LivingSocial touted having more than 10 million subscribers in countries including Britain, Canada, Ireland, Australia and the US.

The Washington-based company reported booking an average of one million dollars daily in revenue and projected that it will take in $500 million in revenue in 2011.

LivingSocial promotes a new local deal daily, offering subscribers discounts of 50 percent or more at restaurants, theatres, bars, stores and other places.

People who subscribe to receive LivingSocial email offers can buy vouchers to take advantage of the deals.

The startup recently launched new versions of the service called Campus Deals, Family Edition and Escapes.