Google Offers Local Coupon Service to Rival GrouponJan 23rd, 2011 | By Roy Rasmussen | Category: Marketing
Google is beta-testing a local coupon service called Google Offers that will rival services such as Groupon and LivingSocial, the social media news site Mashable reported Thursday, citing a leaked Google fact sheet. The fact sheet’s information has since been confirmed by Google.
Groupon works like this: Groupon emails subscribers offers to participate in deal-of-the-day discounts offered by businesses in their area. Business owners only pay Groupon a commission if a certain predetermined number of people respond to the offer. Otherwise the offer does not go into effect. This saves business owners the up-front costs associated with traditional classified advertising.
Groupon’s risk-free business model has proven wildly successful. Groupon was launched in November 2008 by Chicago entrepreneurs Andrew Mason and Eric Lefkofsky. By 2010, Forbes and The Wall Street Journal were “projecting that the company is on pace to make $1 billion in sales faster than any other business, ever.”
Over 500 Groupon imitators have sprung up across the globe. The most successful is LivingSocial, fueled by funding from Grotech Ventures, AOL founder Steve Case, U.S. Venture Partners, Lightspeed Venture Partners, and Amazon.
Google attempted to acquire Groupon for $6 billion at the end of 2010. Groupon rejected the offer and was reportedly instead considering making an initial public offering between $15 billion and $20 billion.
Google Offers is expected to leverage existing Google assets that facilitate local marketing and sales, such as Google Places, Google Maps, Google Buzz, Gmail, and Google Checkout.