A couple of weeks ago Google unleashed their contribution to the Groupon, Living Social, deal a day phenomenon that has blown up in the last couple years. They call it Google Offers.
Have you heard of this little phenomenon called Groupon? If you haven’t, Groupon.com is a website with a deal of the day business model. The site negotiates deals with restaurants, other websites, shops, salons, etc. and gives the option of purchasing that deal to Groupon.com users. Users have less than a 24-hour time frame to purchase the deal before it goes away forever. If you snooze you lose, but the good news is a brand new deal will be there waiting tomorrow.
Today’s deal for New York, for instance, is $49 for a 10-class pass to Yoga Sutra NYC. A 10-class pass normally costs $190, so by purchasing through Groupon you save $141. Sounds like there should be a catch, but I assure you there isn’t. I once purchased a $25 Groupon that allowed me to buy $75 worth of wine from an online retailer. I got 6 bottles of wine, shipping included, delivered to my door for $25. That was a great day.
Everyone has wanted in on Groupon. Yahoo tried to acquire it last year and failed, so Google swooped in and tried to purchase it – twice. The second offer was for $6 billion dollars. Why would Google pay so much for an online coupon group? Mashable.com did the math way back in November 2010 when this deal was about to occur, and at that time, Groupon’s value was growing by about $20 million per day. That is an incredible figure.
Beyond the obvious monetary reason is that Groupon has an exceptional relationship with local advertisers. Groupon is in every major city across the US and it works with local businesses every single day. Groupon has connected with local advertisers in a way that Facebook, Yelp, Foursquare, and even Google have not been able to achieve. The Groupon phenomenon will eventually fizzle out, but the need for local advertising won’t. $6 billion would be a small price for Google to pay to be the king of local advertising.
Since Google couldn’t buy Groupon, it created Google Offers. Currently Google Offers is only available in Portland, but soon it will be available in New York and other cities across the US. The Google Offers site is a lackluster experience when compared to the colorful and witty Groupon.com. It will be interesting to see what happens when Google Offers expands its deals as far and wide as Groupon. Will Google Offers become the champion of the deal a day, or will it be a flop like the unfortunate Google Buzz? Only time will tell.
Portland seems like it would be a good starter city for Google Offers. We’ll see.