NEW YORK (The Deal) -- With Amazon.com (AMZN) writing down its investment in LivingSocial to nothing, the future of yet another social media startup is very much in doubt. While the company insists it will soldier on, sources said it's more likely to end up absorbed by the online retail giant.
John Bax, the CFO of the Washington-based company said LivingSocial's board has elected to re-invest $260 million it recently reaped selling Korean e-commerce company TicketMonster to competitor Groupon (GRPN).
Bax also insisted that cash received for the sale of Groupon shares that LivingSocial picked up as part of the TicketMonster transaction were likewise going back into the company.
The company's revenue fell to $399 million in 2013 from $455 million in 2012, and it lost over $180 million last year, according to a regulatory filing from Amazon.
Granted, it had lost $653 million the year before, but it had also dumped TicketMonster -- at a loss, since it had acquired it for a reported $350 million.
Amazon also said, in the same filing, that its "investment in LivingSocial has been reduced to zero due to our recognition of equity-method losses."
That's quite a comedown for a company that, in rosier times, reportedly valued itself at up to $15 billion, chatting up bankers for an initial public offering to follow Groupon's 2011 debut and raising hundreds of millions of dollars.
Despite Bax's insistence that LivingSocial was focused on the future, the CFO acknowledged that Amazon was a "likely" acquirer of the company, specifically noting that Jeff Bezos' company "has an interest in [LivingSocial's] local offers" business. So despite those continuing losses, LivingSocial is hoping that a right-sized business will soon turn a profit.