What You Need to Know About Facebook's New Groupon


Facebook Deals

A sampling of Facebook deals in Atlanta, one of the first cities where the social network launched its discount offers.

Facebook is launching daily deals offers, called Deals, today.  Deals will compete with Groupon, LivingSocial, the just-launched Google Offers, and myriad other group-buying coupon sites already in existence.

The launch is a big deal; it has been highly anticipated for a while, since Facebook — which, let us never forget, has 600 million users — could be poised to seriously encroach on Groupon’s lion share of the market.  Though Deals is still in the testing stage, we can’t imagine it’ll stay there for long.

So before your Facebook newsfeed is inundated with daily-deals offers, here’s everything you need to know:

  • Like its competitors, Deals is location-based.  As of today, the cities where it’s launching include Atlanta, Austin, Dallas, San Diego, and San Francisco.  We’re interested to see what happens when New York and Los Angeles enter the ring.
  • Unlike its competitors, Facebook won’t be relying on email to send coupon alerts.  Sure, you can sign up for an email alert if you want one, but most offers will just show up in your news feed.
  • Because Deals will be fully integrated with the rest of Facebook, Deals can really up the ante on the social aspect of daily deals.  Sites like Groupon let buyers share deals with friends via Facebook — so will Facebook Deals, natch.
  • Sites like Business Insider are questioning Facebook’s approach to social deals, pointing out that sites like Groupon are powered by human sales forces, whereas the FB is more reliant on engineering and algorithms.  It’ll take a while to see how this shakes out, but “sales by algorithm” could affect the quality and relevance of what Facebook offers.
  • Forget cash or credit cards — everything on Deals will be bought with Facebook Credits, a payment system previously reserved for virtual goods in games and services like movie rentals.

As Deals gets rolling, other questions surround the launch — will Groupon and LivingSocial continue to advertise on Facebook?  If so, it’s probably a testament to Facebook’s general clout, since they’d be buying ads on a direct competitor.  And of course, while most daily deals excitement is focused right now on the sites offering discounts, we have to wonder – 600 million people inundated by coupon culture is an awful lot.  Will the prices people pay for goods and services be forever changed, or will retailers face deals exhaustion and retaliate?


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