Facebook launches Deals on Facebook to challenge Groupon and LivingSocial in the growing social commerce market. Facebook is looking to differentiate by selling group deals.
Facebook April 25 flipped the switch on its Deals on
service, pitching local deals to its users living in Atlanta; Austin, Texas;
Dallas; San Diego; and San Francisco to grab some of the success Groupon and
LivingSocial are enjoying.
Groupon and LivingSocial ignited the local deals market
by offering consumers deals of 50 percent off or more from merchants in their specified
neighborhood. Both have managed to earn hundreds of millions of dollars in e-commerce
While those deals are targeted at individuals, Facebook
is going for a more social bent on deals, which it lets consumers pay for via credit card and, eventually, Facebook Credits virtual currency.
Facebook has partnered with several local deal
providers to integrate their discounts on the social network. These partners
include aDealio, Gilt City, HomeRun, kgb deals, OpenTable, Plum District,
PopSugar City, ReachLocal, Tippr, viagogo and zozi.
"We've worked with partners and local businesses to
help deliver the best social activities in your area," explained
Emily White, Facebook's
director of local. "And once you've found a deal you like, having the deal
on Facebook makes it easy to share, buy and plan with your friends."
For example, eWEEK just received two Facebook
deals: one for hiking and wine tasting and one for family horseback riding
Unlike a recent Groupon deal eWEEK received for half off
flowers from a local florist, these Facebook deals are geared for group outings.
Clearly, Facebook wants users to engage in social activities.
Deals on Facebook come via email, as they do from
Groupon and LivingSocial. Facebook has also created a Deals tab for Facebook
homepages, putting the daily discounts front and center for users who live in Atlanta, Austin,
Dallas, San Diego and San Francisco.
In addition, users
can see the deals friends buy or like in their News Feed. Search Engine Land
provides a nice screenshot walk-through of the service.
Deals on Facebook comes five months after the company dipped a
toe in the local deals waters with Facebook Deals, which it has now renamed Check-in
Deals in light of its broader offering.
Like Foursquare, Gowalla and others before it, Check-in
surfaced on users' iPhone and Android smartphones when they checked into
local restaurants and retailers. The word is that Check-in Deals didn't prove
Most industry watchers agree that Deals on Facebook will
be a greater success story, providing a formidable opponent to Groupon and
LivingSocial, particularly when the service launches across the country and when the company creates a mobile Deals application.
Facebook has 600 million-plus social network users, providing
a massive network of potential e-commerce customers for which the company can
surface daily deals in users' email inboxes, homepages and News Feeds.
Deals on Facebook comes days after Google Offers
became available in Portland, with an expansion to San Francisco, New York City and Oakland, Calif., coming soon.