Facebook Deals is a shot across the collective bows of Google, whose Places local search is on the rise, and check-in services Foursquare and Gowalla.
Facebook isn't lavishing kisses on Foursquare, Gowalla, Google or any other
company with a mind to compete in making money from local businesses with its
new Facebook Deals service.
Facebook Deals connects U.S.
consumers with local businesses via the Facebook Places check-in social service. iPhone users must
install the Facebook for iPhone 3.3 application, touch "Places" and
then "Check In."
Nearby stores participating in Facebook Deals will display a yellow icon.
iPhone users can view the deal and check in to claim it, then show their phone
to the cashier to receive the gift or discount. Starbuck's, McDonald's, Gap and
some 20 other stores are currently enrolled in the Deals program.
Consumers who check-in via Deals get free or discounted goods, or have donations
sent to charities. Businesses can lure both new and returning patrons,
explained Tim Kendall, director of monetization for Facebook, during the Deals
launch Nov. 3.
Facebook made it clear during the launch event that it doesn't explicitly
make money from Deals--for now, at least. Over time, Facebook will urge its
business partners to promote their products in Facebook's display ads.
"The Deals concept starts to solve an age-old problem, at least in the
Internet world, that businesses had," said Emily White, director of Local at
Facebook. "For a long time, merchants have been told 'you need to be
online.' But for local businesses, the reason behind that hasn't been entirely
obvious to them."
Deals, White argued, will turn fans, visitors, and eyeballs into real
dollars. Merchants can sign up for Deals with a one-page workflow form.
Thanks to its 500 million-plus users, Deals is a major threat to services
such as Foursquare and Gowalla, which rely on the check-in mechanism to give
consumers store coupons, bargains and other perks.
Foursquare has 4 million users today, but who would use it going forward
when shoppers can check-in from Facebook and access more or better deals?
Forrester Research analyst Augie Ray toldeWEEK:
"Facebook has found the perfect recipe for encouraging people to check
in, including those who never before saw a reason to do so."
"This is a win-win-win," he continued. "Consumers will be encouraged to
check in more often because of the deals available; businesses can drive more
traffic and reach consumers with offers that cost nothing; and Facebook wins by
increasing engagement on the platform."