Amazon, an investor in LivingSocial, one of the leaders in the group buying space, is starting to use its recommendation engine to promote daily deals to its users, according to AllThingsD.This is important.
One of the biggest problems daily deals sites face is the fact that their offers are largely not relevant for users, both in terms of location and tastes.
Since before its IPO, Groupon has been working on more advanced recommendation technology, but so far it hasn’t fared well. One suspects that one reason why recommendations haven’t worked yet is simply because a limited type of merchant wants to do daily deals on Groupon, and there needs to be a critical mass of deals to send every user a special recommendation.
That being said, if Amazon finds an algorithm that powers useful recommendations and can use it to drive sales for its partner sites, it will have a great revenue opportunity in its hands.
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