City Desk

Could Gmail’s New Three-Tab System Hurt LivingSocial?

The latest challenge for LivingSocial—the cash-strapped, lay-off heavy D.C.-based company—could come from the omnipresent Google.

As Washington Business Journal first pointed out, the online coupon company seems wary of Gmail's new organizational system that automatically categorizes LivingSocial emails as promotional messages, filing the emails in a tab separate from the user's primary inbox.

Last week, the company sent out an email to its subscribers instructing them how to divert LivingSocial emails back to their primary inboxes.

But the company's senior manager of consumer communications said in an email that LivingSocial is "happy to report that we have not seen a significant impact since Gmail’s three-tab rollout." (Washington City Paper also sells daily deal and is still assessing the impact of the new Gmail.)

If this seemingly innocuous Gmail change has the potential to impact the company's bottom line at all, it's worth keeping an eye on. After all, the company's nearly $33 million in District tax breaks is contingent upon the firm employing 1,000 people in the District by 2015 and hiring 50 additional people per year after that, with half of all new hires being D.C. residents. LivingSocial must also build a new office in the District of at least 200,000 sq. feet.

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