Web site won’t work? Just shut down the whole company

November 13, 2013
LivingSocial chief executive Tim O'Shaughnessy, speaking in Tysons Corner in 2011. (Photo by Jeffrey MacMillan/For Washington Post)
LivingSocial chief executive Tim O’Shaughnessy, speaking in Tysons Corner in 2011. (Jeffrey MacMillan for The Washington Post)

LivingSocial, the struggling online deals company, has been facing a new problem in the past day or so: a massive outage that has shut down the LivingSocial Web site and mobile app.

The site went down around noon Tuesday and remained out as of this writing (more than 28 hours later). Visitors to the site were greeted with this:

(Screenshot taken from www.livingsocial.com on Wednesday afternoon)
(Screenshot taken from www.livingsocial.com Wednesday afternoon)

A spokeswoman told my colleague Steven Overly that there is no indication of a cyber attack. In addition, the D.C. company posted this on their blog today:

We can let you know now that it is the result of an internal issue, and there is nothing to indicate that this was the result of any external factors. Also, there is nothing that leads us to think that any consumer or merchant data, or financial information has been compromised.

As a result, LivingSocial can’t send out any deals. The company has delayed sending out e-mails and any new promotions until the site is live again.

Now, to the average observer, this just looks like a troubled company experiencing additional headaches. Sites go down. Technical problems wreak havoc. These things happen. But for some people, like Will Oremus at Slate, the site outage sounds like a good excuse to shut down the entire company:

Hey, LivingSocial: You guys gave it your best shot. You had some good times there for a while. But maybe the next time you’re inches from bankruptcy, you should go ahead and pull the plug rather than sucking up another $110 million in life support. Come to think of it, why not do it right now? I’m sure many of your employees are very smart people, with far more worthwhile projects ahead of them. And I think the rest of the world has already learned to go on without you.

LivingSocial, which is trying to shift away from the fading daily deal model, has clearly had its recent problems. It recently had to apologize after putting dreidels in a “greed”-themed room at a Halloween party. And it reported a loss of $25 million during the third quarter, putting it at $106 million lost this year. The company laid off 160 workers in the District last year (and 400 employees overall) and it can’t claim the D.C. tax breaks approved last year because it still doesn’t have enough employees. Plus, it just sold a profitable business in South Korea to Groupon, its longtime rival.

Still, that advice must be deeply appreciated by the 602 people LivingSocial said it was employing as of last month.

Disclosure: Jeff Bezos, who owns The Washington Post, is the founder and chief executive of Amazon.com. That company owns 31 percent of LivingSocial, according to Amazon’s most recent SEC filings

Mark Berman is a reporter on the National staff. He runs Post Nation, a destination for breaking news and developing stories from around the country.
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