Google (NASDAQ:GOOG) Offers, the local deals service the search engine provider intends to use as an incentive to get users to patronize its Google Wallet mobile payment service, has stormed back from a lethargic August to see robust sales in September.
Daily deals aggregator Yipit noted that revenue for Offers, a Groupon-like service that offers consumers discounts of 50 percent or greater in over three dozen U.S. cities, dropped 23 percent from July despite a 22 percent increase in the total number of offers.
The firm noted that revenue per deal declined 37 percent, propelled by a 46 percent decline in the number of vouchers sold per deal.
Offers has enjoyed quite a bounce back in September. In the third week of the month, Google has already surpassed last month's total revenue of $265,000 and is on track to more than double this figure by month's end, Yipit said. That's a half a million dollars for the fledgling service that plays were the barrier to entry are nil.
Thanks in part to a high-profile heads-up on its Google.com homepage, Google's most notable deal this month was an offer for tickets to the Museum of Natural History in New York, which grossed more than $85,000. Now Google knows Google.com makes for an effective advertising vehicle.
Unaiz Kabani, a data analyst for Yipit, said in a blog post it isn't that Google has piled on deals in its markets; deals are just performing better than they had, with sales per deal up 160 percent (from $2,794 to $7,256).
Also, the number of vouchers sold has improved 5 times the August rate, from 169 per deal to 893 per offer. That's more than Groupon (736) and LivingSocial (372).
A Google spokesperson declined to confirm or comment on Yipit's numbers for eWEEK, but noted that the company is pleased with the performance of Offers, which launched first in Portland last April and has seen an increasing stream of new cities as targets. This includes Dallas, where Offers launched Sept. 26.
Kabani attributed Google's success to working with high-profile brands, such as Fandango in Portland and Amoeba Music in San Francisco. The increase in Offers' sales also coincides with its launch this month in 5 new major markets, including Austin, Boston, Denver, Seattle and Washington, D.C.
Can Google keep up this Offers growth? It's tough to say.
There are over 300 daily deal providers or aggregators in the market today. Consumers are woozy from deal fatigue, seeing some of the same deals from Groupon, LivingSocial and Offers over and over, many of which are not attractive.
Recognizing the moving target that daily deals have become, Microsoft just launched Bing Deals, which is another deal aggregator, like Yipit.
Even so, Kabani likes what he sees from Google Offers this month:
"Google's willingness to leverage its powerful existing distribution channels and its recent strategic moves in the local e-commerce space demonstrate that Google Offers is well-positioned to compete with the likes of Groupon and LivingSocial if, and when, Google chooses to deploy the full suite of tools at its disposal."