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Google to launch daily deals site

After failing to acquire daily deals site Groupon, Google has apparently decided that if you can’t buy it, then build it. Social media web site Mashable reports that Google is preparing to launch Google Offers, “a new product to help potential customers and clientele find great deals in their area through a daily e-mail.”

Led by Groupon, and competitors such as Living Social and Dealmap, the daily deals market has exploded over the past year, so much so that some commentators now speculate that Groupon could be worth twice as much as the $6 billion Google offered just a few short weeks ago.

This is how the daily deals market works: A small business – anything from a restaurant to a spa to a bowling alley – agrees to discount the cost of its goods or service by 50 percent or more. Groupon, or one of its competitors, then markets that discounted offer to its subscriber base in the form of an online coupon. Subscribers pay Groupon via Paypal or credit card and then take the coupon to the local business to cash in their discounted deal.

Most deals are presented on a regional basis and run for just one day, although they can be extended. Once a subscriber signs-up, they get notified of a new local deal every day, usually by e-mail or text. Supposedly everybody wins: Groupon makes a hefty commission, the local business gets a rush of new customers, and the consumer gets a great deal.

The success of some of these offers is already the stuff of legends. Back in August, Groupon launched its first national deal, offering $50 of Gap apparel and accessories for just $25. By the end of the day, 441,000 coupons had been sold, grossing a little over $11 million. Although Groupon declined to disclose its revenue share with The Gap, most observers believe it was heavily skewed in Groupon’s favor.

And just this week, close to a million people signed up for Living Social’s offer of a $20 Amazon gift voucher for just $10. (Amazon owns Living Social, so this was a great way for Amazon to boost the fortunes of its recently-acquired investment!)

It’s hard to know what impact Google’s entry into this increasingly crowded marketplace will have. However, its vast resources and existing relationships with small businesses through local search marketing could give it a considerable head start. It could also draw deals away from Groupon and the other deal sites by offering business a better revenue share.

Whatever the impact of Google Offers, this is an area where it’s hard to see how the consumer can lose. Just sign-up and those great deals will be waiting for you in your Inbox!

Comment by Milcah, posted 1/24/2011, 11:59 AM:

I wanna say wow because they're going to compete with someone because they wouldn't sell to them, and at the same time I wanna say yaay because i'm a frequent Google user.
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