Facebook gets rid of Deals

By Jeff Hughes August 26, 2011

Facebook announced late Friday that it would be bowing out of the daily deal business. The Groupon-inspired Facebook Deals was discontinued after only four months of testing.

In a statement received by Reuters and other outlets, a Facebook spokesperson wrote:

“After testing Deals for four months, we’ve decided to end our Deals product in the coming weeks. We think there is a lot of power in a social approach to driving people into local business. We’ve learned a lot from our test and we’ll continue to evaluate how to best serve local businesses.”

The end of Deals seems like a logical follow after the nixed Facebook Places app, though the company insists that it will still maintain the Check-in feature as well as Ads, Pages, and Sponsored stories; local business aren’t being completely shuffled aside.

Facebook Deals began its short-lived existence in April this year, sparking anticipation of heated and frenzied competition with Google Offers, Living Social Groupon and the other sites packed into the cramped pool of local-discount services. Deals had already put down roots in five major cities, set up deals with merchants in the area and set up offers with other daily deal companies such as ReachLocal, OpenTable, Tippr, aDealio and more.

Does Facebook’s retreat say something about the daily deals business?

The vacancy means less pressure for those still in the game (looking at you S-1 filing Groupon), but there has been some criticism of Groupon’s business model and talk of the daily deals enthusiasm waning.

Co-founder of Yipit.com Vinicius Vacanti weighed in on the topic, telling Reuters, “I don’t believe this means daily deals are not a viable business. It more suggests that large media and tech companies can’t just ‘turn on’ daily deals and expect them to work. It has to be more thoughtfully integrated into their existing product.”

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