How Google can take over the daily deal space

Faith Merino · January 21, 2011 · Short URL:

Google Offers could be another clone, or it could be the innovation the daily deals space needs

Google is reportedly gearing up to launch its much-talked-about Groupon clone, Google Offers.  A fact sheet leaked to Mashable was posted Thursday night, outlining a fairly familiar business model: merchant puts up the goods at a steep discount, customers unlock the discount when a certain number sign up, customers get awesome deal, merchant gets lotsa money.  Google confirmed that it is, indeed, launching a Groupon clone:

Google is communicating with small businesses to enlist their support and participation in a test of a pre-paid offers/vouchers program. This initiative is part of an ongoing effort at Google to make new products, such as the recent Offer Ads beta, that connect businesses with customers in new ways. We do not have more details to share at this time, but will keep you posted.

Google will hold 80% of the merchant’s revenue share (whatever that is) for three days after the deal has run, and reserve the other 20% for 60 days to take care of refunds, Mashable reported.

So what will Google offer merchants and consumers that they can’t get at Groupon, LivingSocial, and all the other myriad Groupon clones milling around in the ether?  For one thing (and this, I’m sure, will be Google’s biggest selling point), merchants will get exposure across Google’s ad network at no extra cost.  The great thing about being Google is that you already have the infrastructure in place, because you’re freakin’ Google.

Beyond that, it’s still too hazy to tell, but when Google was in talks with Groupon about an acquisition, the possibilities seemed endless.  With Google and Groupon together, Groupon would deliver the human element while Google would back it up with the technology needed to set it apart from the clones.  But the deal fell through and now Groupon has raised almost $1 billion with stated plans to invest in technology without Google’s fatherly guidance.

So, I—and I’m sure many other people—will be sorely disappointed if Google Offers does not deliver the disruptive new platform that was expected to shake up the daily deal industry with the Groupon acquisition. 

Google has made a name for itself in other spaces based on its emphasis on “openness,” and this openness could actually give the company a big leg-up in the daily deals space, which has become so overpopulated that a number of startups are looking toward a more open, streamlined format.  For example, Tippr CEO Martin Tobias recently invited other collective buying companies, publishers, and social networks to a meeting held in December to discuss an “open deal format” that would allow for open exchange of group deal information among deal providers, thereby allowing advertisers to promote deals across multiple platforms to various audiences.  Google was actually among those invited.

Similarly, DealOn is looking toward a future where merchants will be able to load their deals into a pipeline and any reseller/daily deal site can bid on the offer and, once approved, resell it on its own platform.

Could Google Offers duplicate its Android success and meet a need for openness in the daily deals space?


Offers Fact Sheet

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