Facebook Deals Poses a Challenge for Google
How Deals affects local search services such as Google Places is less certain. Google has thousands of local businesses using its Places solution, which lets local businesses pay to customize Place pages that surface on Google.com and Google Maps. Businesses also pay Google $25 per month to offer Tags--little yellow call-outs in their Place Pages--that tout specials. Google last week launched Google Boost to make it easier for small businesses to build their own AdWords ads to pair with their Place Pages.One could argue that a combination of Facebook Deals with Google Places would provide a formidable front for local online search ads. As it is now, Google lacks the social, and Facebook lacks the local. Unfortunately for Google, Facebook will be able to sign up new business partners for Deals faster than Google can infuse Places with social elements. It's a race to be sure, but one that Facebook is leading even though Deals is only available on the iPhone for now. There is a silver lining for Google and the startups: Very few people in the U.S. are using check-in services yet. A fresh study released today from Pew Research Center's Internet & American Life project found that only four percent of online adults use a service such as Foursquare or Gowalla. On any given day, one percent of Internet users are using these services. This means check-in services are ripe for exposure to a greater percentage of the country's 60 million or so smartphone users. It also means more users and financial opportunities for Google--if it adds similar check-in services--Foursquare, and Gowalla. Facebook Deals may actually help buoy financially driven check-in and deal-making on the Web in general, a tribute to the rising-tide-lifts-all-boats aphorism. "It is possible that Facebook will help bring location into the mainstream," Kathryn Zickuhr, who wrote the Pew report, told The New York Times. "It would not be surprising to see if that helps people get used to it."
This is an impressive layer cake of local search and advertising, but it doesn't really supply the social element that the other check-in services supply. Google has check-in technologies via Google Buzz for mobile and Google Latitude, but it hasn't properly tied them to Places.