Facebook launches deals program, rivals Groupon

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Leveraging social tools and direct sharing among friends will be “a key to success for daily deal companies” going forward, says Lou Kerner, social media analyst at Wedbush.

This is not the first time a social network has made a foray into disseminating deals. Twitter launched its own daily deal program called Earlybird Offers last year but canceled it after just two months. Last November Facebook launched a product called Check-in Deals that allowed users to “check in” via their mobile phones when they visit certain businesses and in turn receive discounts and other special offers. Location-based social network Foursquare has a similar program.

Offers through Facebook can last anywhere from a day to a week. The social network won’t disclose how much commission it takes. (With Groupon and others, the deal site typically takes up to half the revenue.)

There are hundreds of Groupon copycats willing to accept lower commissions, but many small businesses prefer to partner with larger companies such as Groupon and LivingSocial because they reach more potential customers.

Facebook will bring deals to even more people. While Groupon has 70 million members and LivingSocial has 28 million, Facebook has 500 million users worldwide.

Add to that the fact that many small businesses already have a Facebook presence, and the social network becomes a good fit for daily deals, says Greg Sterling, senior analyst for Opus Research.

Groupon declined to comment on Facebook’s competitive threat or whether the coupon site will continue to advertise on Facebook.

As a share of overall Web surfing, visits to group-buying sites grew ten-fold over the past year, according to research firm Experian. LivingSocial had 7 million unique visitors in March, up 27 percent from February, making it one of the 10 fastest-growing websites in the U.S., according to ComScore.

Groupon and LivingSocial have shown how much demand there is out there,” Sterling says. “Facebook, if they do this right, can have a big hit on their hands.”

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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