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Facebook challenges Groupon with deals in five U.S. cities

Social networking giant Facebook has decided to challenge the likes Groupon and Google Offers, launching a new Deals on Facebook program that clues users into significant discounts on products and services. But Facebook isn’t just putting the deals out there: they’re including a significant social component so, if customers like what they see, they can share their experience—and perhaps beef up their own deal—by getting their Facebook friends to participate too.

Facebook Deals (Austin City Limits)

Facebook’s local deals program is initially available in San Francisco, San Diego, Dallas, Austin, and Atlanta, although the company says it hopes to expand to offering to other regions soon. Facebook is working with aDealio, Gilt City, HomeRun, kgb deals, OpenTable, Plum District, PopSugar City, ReachLocal, Tippr, viagogo, and zozi to bring deals to its users.

Facebook users can discover deals in a number of ways: users in eligible markets will find they now have a “Deals” tab, and Facebook will happily send users notifications about deals available in their areas. Friends can also share deals with their friends via their news feeds via Facebook’s near-ubiquitous “Like” button.

The success of Groupon has made group-couponing on of the fastest-growing areas of Internet businesses, in part because the deals are often so substantial—it’s not unusual for an online group deal to offer discounts of 50 percent or more on goods or services. Facebook wants to be part of that revenue chain; however, it also wants to distinguish its service from competitors by making the entire experience social, and focusing on products and services that appeal to groups of people. Thus, Facebook deals are more likely to focus on group activities than on personal hygiene products.

In some cases, users will become eligible for a “friend bonus” if they get one or more people in their social networks to take part in a deal. Facebook deals will be of varying duration: some may last as long as a week, but some may only be available for a few days.

Deals on Facebook isn’t the company’s first foray into offering members special deals: the company launched the location-based Check-In Deals late last year that enables users to “check-in” with their phones when visiting a business to see if any discounts or offers were available. Rather than competing with Groupon, Check-in Deals is intended to help Facebook compete with the likes of Foursquare. In both cases, Facebook’s 500 million-strong user base gives the company massive potential in the deal-making arena—and it’s a good bet that anyone using other group-couponing services is already using Facebook.

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