Facebook Deals is kaput, just four months after its high-profile launch to challenge market incumbents Groupon and LivingSocial. This is perhaps a sign there is too little differentiation in the space.
it has shuttered its local daily deals service, a 4-month-old effort to
challenge Groupon and LivingSocial in the burgeoning but markedly
copycat-filled market for social commerce.
April, Facebook Deals let local businesses pitch deals to Facebook
living in Atlanta; Austin, Texas; Dallas; San Diego and San
Francisco. The social network giant aggregated daily discounts of 50 percent or
more from local merchants, as well as from providers such as aDealio, Gilt City
issued from market leaders Groupon and LivingSocial target individuals,
Facebook offered a more social bent on deals, including discount packages for
concerts, group hikes and wine tastings. Facebook Deals came via email and a
special Deals tab for Facebook homepages, but they also surfaced in News
Feeds to show users what their friends are buying.
failed to gain traction, though Facebook declined to say why it pulled a quick
trigger on it.
Deals for four months, we've decided to end our Deals product in the coming
weeks," a Facebook spokesperson told Reuters Aug. 26
. "We think there is a lot of power
in a social approach to driving people into local businesses. We've learned a
lot from our test, and we'll continue to evaluate how to best serve local
challenge is that online daily deals have become a commodity business. Daily
deals Websites sprout up like mushrooms; Amazon just extended its AmazonLocal deals service to New
Group analyst Jeremiah Owyang told Reuters: "There are no barriers to
entry. It's just not going to work because everybody offers it and therefore
the margins go down."
is girding for an initial public offering, is universally acknowledged as the
market leader in daily deals.
However, HitWise Experian analyst Bill Tancer said Groupon
has experienced almost a 50 percent traffic drop to its Website since its peak
in the second week of June 2011, compared with last week.
same time, Living Social has enjoyed 27 percent growth in visits to its own
Website. The figures exclude mobile Web or access via applications.
this suggests the increased number of competitors (the commodity factor), not
enough of the right deals to suit users' preferences and "deal
fatigue," is causing traffic shifts at the top.
that PriceGrabber found that 52 percent of those surveyed said they felt
overwhelmed by the number of daily deal emails they receive each day.
to market leaders Groupon and LivingSocial, which have carved out major
portions of the East and West Coast daily deals sales, as well as parts of the
Midwest and South, does not bode well for Google Offers, the search engine
company's take on the model.
Google Offers is only available in New York, San Francisco
and the surrounding Bay Area, and Portland
hopes to pair a broader roll-out with its Google Wallet mobile payment service
, which is
launching in New York and San Francisco this summer to let consumers use their
smartphones to tap and pay for goods from select retailers.