Amazon on Thursday confirmed that it has made a $175 million investment in LivingSocial, a site that provides deals on entertainment outings in major cities.

LivingSocial also secured an additional $8 million from Lightspeed Venture Partners.

Amazon said LivingSocial will use these funds to continue its rollout to additional locations. It is now available in 120 locations throughout the U.S., Canada, the UK, Ireland, and Australia. Recently, LivingSocial acquired adventure company Urban Escapes, and added three new sections to its site: family edition, campus deals, and escapes. LivingSocial also invested in Australia's Jump On It.

Amazon said LivingSocial is expected to report revenues well over $500 million in 2011.

"To be the biggest player in the local commerce space there is no one better to work with than Amazon," Tim O'Shaughnessy, CEO of LivingSocial, said in a statement. "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."

The news comes amidst rumors that Google is prepping to purchase rival deals site Groupon for anywhere between $3 billion and $6 billion. LivingSocial is reportedly valued at about $1 billion. According to recent stats from Hitwise, however, LivingSocial is not quite a threat to Groupon.

"It appeared in spring of this year, that LivingSocial's visit growth would make it a viable threat to Groupon. As the chart denotes, that growth-spurt was very short lived," Bill Tancer, general manager of research at Hitwise, wrote in a blog post. "LivingSocial's market-share is [also] almost an order of magnitude lower than Groupon's. So one-tenth of $6 billion dollars is less than LivingSocial's projected valuation. Of course traffic to valuation is a gross over-simplification. Perhaps LivingSocial's audience composition would validate a higher value."

An interesting note, Tancer said, is that LivingSocial has managed to capture a larger percentage of the "young cosmopolitan" demographic than Groupon – 6.32 percent for LivingSocial compared to Groupon's 3.06 percent.

"From prior analysis we know that Young Cosmos are one the strongest early adopter segments. Despite the very unimpressive traffic numbers, perhaps Amazon is recognizing the potential for LivingSocial to move beyond its current early adopter phase," Tancer wrote.