Facebook Boards the Daily Deals Gravy Train
- By Ryan Singel
- April 26, 2011 |
- 1:40 pm |
- Categories: Advertising, Social Media
The social networking giant has already dabbled in deals by offering discounts to those who “check-in” at locations, but Facebook Deals are geared more towards activities that people might like to do with friends — from white water rafting to wine tasting — with fewer deals that are solitary such as nail salons.
Users can discuss deals and like them on Facebook without buying. Facebook is sourcing deals both directly from merchants and through the smaller daily deal sites such as aDealio, Gilt City, HomeRun, kgb deals, OpenTable, Plum District, PopSugar City, ReachLocal, Tippr, viagogo, and zoz.
Deals are purchased directly through Facebook’s Credits payment system with credit cards and PayPal accepted.
Facebook’s entry into the seemingly neverending daily deal market comes just a few days after rival Google introduced its beta deal service in Portland. Facebook’s launch is considerably wider, covering Atlanta, San Francisco, Austin, Dallas, and San Diego.
Facebook also has a massive distribution advantage. Sites like Groupon and LivingSocial offer incentives to get users to share the deals they bought with their friends on Facebook. On Facebook, that’s the default setting, naturally (there’s a tiny check box to turn it off).
That means that even if only a small percentage of Facebook users visit the deals page (there’s a link on the left side of your profile) or subscribe to the deals, many more users will see the deals bought by their friends, who act as an editorial filter over the deals.
That’s a massive advantage over Google, whose users are very connected. However, Facebook is getting itself into a business that requires high touch customer support, both to manage the deal with businesses and with its own users.
But as Groupon has proven in a short time (it’s already planning an IPO), there’s a lot of money to be mined out of steep discounts and Facebook’s new service is bound to get a substantial share of it.
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- Facebook Launches ?Check-In? Service to Connect People in Real Space
Ryan Singel covers tech policy, broadband, search and social networking for Wired.com.Follow @rsingel and @epicenterblog on Twitter.
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