LivingSocial, the local deal provider and the second player in the field after GroupOn, has recently received a funding from giant Amazon worth of $175 million along with another $8 million from Lightspeed Venture Partners. LivingSocial is doing pretty good judging by its daily revenues go around 1$ million and in turn invests in Jump On It, offering them $5 million and the acquisition of Urban Escape.

Amazon is a top player in e-commerce, and its investment in LivingSocial brings benefits for both parties. LivingSocial needs to attract new customers in order to catch up with GroupOn: ”To be the biggest player in the local commerce space there is no one better to work with than Amazon. As the social shopping space continues to heat up, LivingSocial is committed to staying focused on providing the high level of quality that consumers and merchants have come to expect when working with us.” Amazon will benefit greatly from this partnership also as the gift certificates are pure marketing data. Living Social can offer its’ users data to third parties and increase revenues.

At the moment LivingSocial is offering $20 Amazon.com gift certificates for $10. Although many referred to this deal as being nonsense, figures show it has managed to attract over 430,000 sign-ups.  As such, the gross revenue for LivingSocial from this deal alone reaches nearly $4 million, and the net revenue is estimated around $2 million, according to Information Week.

It’s concern around participating small businesses that raises questions about the LivingSocial/Amazon deal. At first site it is obvious these businesses will not have spectacular revenues, but they will definitely attract new customers that have subscribed for newsletters from LivingSocial or GroupOn, and to be frank this marketing strategy is really worth the money losses.