Groupon is buying LivingSocial, plans to downsize business to 15 markets from 27

Some significant consolidation is going down in the world of daily deals — going down being the operative phrase here. Today, Groupon announced it would acquire LivingSocial, its onetime big rival that was partly owned by Amazon, for an undisclosed sum. Lest you think that this is a power move made by companies at their peak, think again: the news comes as a quiet sidenote in Groupon’s Q3 earnings results, which beat analysts expectations on revenue of $720.5 million and earnings per share of -$0.01, but showed a continuing net loss for the company, of $35.8 million for this last quarter.

Groupon today also said it plans more downsizing of its overall business, on top of the several closures and layoffs of the last few quarters. In Q2 the company was operational in 27 markets; the plan will be to bring that down to 15. “We are pursuing strategic alternatives and other options to exit the remaining countries, which we expect will continue into 2017,” the company noted.

The LivingSocial deal, which is expected to close in November 2016, is “not material” to Groupon’s earnings, meaning it is small enough that Groupon does not have to disclose the price.

This is a whimper of an ending for LivingSocial, which once competed hard against Groupon for both merchants to list deals for their goods and services, and consumers to buy those offers.

The company had raised an eye-watering $928 million in venture funding over the years, including notable investment from Amazon, and it spent much of that funding aggressively trying to expand. It failed to find a sustainable market for its platform, and went through several rounds of restructuring and pivoting, leading to today’s final deal.

Groupon has fared only somewhat better. As demand for daily deals fell off drastically, the company has tried to spin one idea after another in areas like mobile commerce and building out specific vertical businesses, for example around restaurants and travel. It even looked to capitalize on LivingSocial’s downsizing at times, for example when it acquired TicketMonster assets from its rival in Korea in a bold Asia play, only to sell them off again just over a year later.

The company continues to quietly work on rebuilding its business and points to underlying signs that there is a market for its brand and its role in offering customers more offers from merchants local to them. The company says it added 1.2 million customers in the last quarter and posted gross billings of $1.43 billion.

“Our strategy continues to deliver results with double-digit growth in North America local billings and our highest quarter for customer acquisition in over three years,” said Groupon CEO Rich Williams. “We are looking forward to a strong finish to the year and further progress on our mission to make Groupon a daily habit for consumers.”

However, trends are not going in the right direction right now. Those gross billings are actually down 2 percent on a year ago, and gross profit of $314.1 million was also down on $328.9 million from a year ago, weighed down by international.