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Facebook just took the next step in its Facebook Deals service by announcing that it plans to test Groupon-like offers.

The service will get started in San Francisco, San Diego, Dallas, Atlanta, and Austin, Texas, the company said last week in a statement. It will be part of Facebook’s existing Deals program, which lets businesses offer specials to users. With the new feature, Facebook’s staff will work with businesses to spotlight deals and encourage users to share them with friends.

Facebook’s program will also let users see discount offers from partner services, including ReachLocal, Gilt City, Tippr,, PopSugar City, KGB Deals, Plum District and Zozi.

When Facebook Deals launched last year, it was inevitable that the company would make a more aggressive play in the space. By going both the aggregation route and providing its own group-buying infrastructure, Facebook has the potential to unleash a double-whammy on the industry. As I see it, two of the biggest challenges for players in this market are signing up merchants and providing relevant deals located near the consumer on a regular basis. Facebook has an amazing channel to talk to all merchants with Facebook Pages in a specific market, which could solve both problems.

I can see the tagline already — “Friends don’t let friends pay retail.”

This Post Has 6 Comments

  1. They’re certainly launching with a lot of deal partners, which may give the merchants that Facebook’s staff “will work with” more incentive to get started early (not that incentive is a problem when it comes to Facebook product partipation). It also eliminates even the most remote chance of a “ghost town effect” occurring.

    Inventory check here: FB has now gone directly after Google, Foursquare, (and other LBS), Netflix and now Groupon. Who am I missing? And who’s next?

  2. I imagine a lot of these group buying services will start marketing the fact that they are official Facebook Deals partners.

    Re the Inventory Check with FB Credits I think you could also add PayPal to the equation. Facebook Photos goes after Flickr. Facebook News Feed and Twitter. and on and on.

  3. Facebook is building the mother of all walled garden hope people will stay in it from cradle to grave. I think they should add auction, classified, music download, tax services, etc…

  4. Facebook has done a good job to this point of being an innovator, a leader. But now it has turned into a copycat. After further review, wasn’t the whole premise of Facebook “stolen” from Zuckerberg’s peers at Harvard. Hmm…

  5. Cory & Matt,

    Intersting points. Btw, Facebook already has classifieds through Oodle. H&R Block could be next! Regarding walled gardening, it’s an interesting duality: on the one hand, Facebook has opened up its API for developers to build on top of and publishers to integrate. Several businesses have been made or enhanced through this. On the other, it’s continually growing its suite to increase site stickiness. And we already know that average time-on-site per user is otherworldly.

  6. Jed, FB is very clever in letting other people “plant” in their walled garden to further reinforce the site stickiness. The big question is whether people are using FB to interact with friends and family but would they do the same with advertisers. Several studies have revealed that CTR on FB is much lower than Google’s.

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