Google Offers Nips at Groupon's Heels in Portland

Google Offers launched to challenge Groupon in Portland, and it is coming to New York City, San Francisco and Oakland soon. Sign up to request Google Offers in your city.

Google April 23 confirmed it has rolled out its Google Offers Groupon clone service in Portland, Ore., offering people in that city local discount deals of 50 percent or more to restaurants, bars and other stores.

The Google Offers landing page also currently invites users to sign up to receive local deals in New York City, Oakland/East Bay, Calif., and San Francisco.

Users whose cities are not yet represented in the drop-down menu may click to enter their email addresses and zip codes to let Google know they want Google Offers in their city.

"Today we launched a marketing campaign inviting Portlanders to sign up for a test of Google Offers-to get great deals delivered right to their in-boxes," Google told eWEEK. "Offers is part of an ongoing effort at Google to make new services that give consumers great deals while helping connect businesses with customers in new ways."

Google Offers closely hews to the formula popularized by Groupon, which rocketed to stardom in 2010 and spurned a $6 billion acquisition bid from Google in December. Groupon, which competes with LivingSocial, Gilt Groupe and others, went on to raise $950 million from investors and has met with bankers to discuss an initial public offering.

Following Google' failed acquisition bid for Groupon, word of Google Offers leaked in January, suggesting Google was preparing the service in its Web service pipeline in the event it couldn't bag Groupon.

According to an early fact sheet, Google fashions marketing material for an offer, emails it to local subscribers and advertises it on the Google Offers Web page.

A subscriber-once receiving the local deal of the day-may buy that deal. When enough people have made the purchase through Google Checkout, the deal kicks in. Users may then redeem their coupon at a local store by printing it out beforehand or on their mobile phone.

Google will reportedly pay out 80 percent of a business' revenue share three days after its deal runs. Google will hold the remaining 20 percent for 60 days to cover refunds before sending the rest.

Ironically, Google Offers is going to beta in Portland amid Margo Georgiadis' departure from the post of vice president of Google's Global Sales Operations to become Groupon's new COO.

That's a big coup for a company making hundreds of millions of dollars by offering customers discounts to their local businesses.

Meanwhile, Google Offers has just been named in a blanket lawsuit by Walker Digital, which claimed in Delaware court the services infringe four patents related to online deal making.