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Google Set to Deal Groupon Some Competition with ‘Offers’

Following yesterday’s headline grabbing news about Eric Schmidt being removed from his CEO post in early April, Google just happened to let the cat out of the bag on a new product designed to give Groupon and LivingSocial a run for their money. The new product is around the daily deal concept and will be called Google offers.

Of course, no one is naïve enough to think that this ‘leak’ was an accident. Even if it was in this day and age no one believes that anything is ever ‘leaked’ anymore but rather given to a publication in exchange for some drama filled presentation of the ‘news’.

This particular exclusive went to Mashable and they report on Google Offers

Google is preparing to launch Google Offers, the search giant’s Groupon competitor, Mashable has learned. We have the documents to prove it.

One of our sources has sent us a confidential fact sheet straight from the Googleplex about the company’s new group buying service. “Google Offers is a new product to help potential customers and clientele find great deals in their area through a daily email,” the fact sheet says.

Google Offers looks and operates much like Groupon or LivingSocial. Users receive an e-mail with a local deal-of-the-day. They then have the opportunity to buy that deal within a specific time limit (we assume 24 hours). Once enough people have made the purchase, the Google Offer is triggered and users get that all-too-familiar $10 for $20 deal for that Indian restaurant you’ve never tried.

From what we can tell, Google Offers will be powered by Google Checkout. It also includes Facebook, Twitter, Google Reader, Google Buzz and e-mail sharing options.

Here’s a look at one of the pages.

Google has been starting to push the idea to the SMB set and it makes sense considering the fact they finally have a human element to talk to the 4 million plus verified Place Page businesses about other offerings from the search giant like Tags and Boost (where available).

What is most interesting is just how truly crowded the daily deal landscape has become in the past few days. The sentence in the Mashable write up from above that now mentions Groupon and LivingSocial in the same breath may not have happened had it not been for the wildly successful Amazon deal from LivingSocial that was obviously designed to jumpstart the competition.

I suspect Google saw this move and decided that it would be a great time to ‘leak’ something about their offering so they could be mentioned in the same breath as the biggest players in an increasingly crowded space.

What this kind of news and competition does to the IPO potential for Groupon remains to be seen. The space has quickly gone from being Groupon’s eminent domain to now having Amazon and Google in their daily deal grill with the same offering (the complaint of many that Groupon was not unique and could be readily cloned) and very deep pockets to put up a serious threat to Groupon’s perceived market dominance. Has all this new found ‘competition’ taken some of the shine off the Groupon apple?

So back to Google. Now the whole Place Page push is coming full circle since it is likely (though not mentioned in the Mashable post) that a verified Place Page will be an important part of this equation as well as integration into the Hotpot recommendation mechanism that has been talked about but not fully promoted just yet.

Google made a ‘statement’ to Mashable yesterday as follows

“Google is communicating with small businesses to enlist their support and participation in a test of a pre-paid offers/vouchers program. This initiative is part of an ongoing effort at Google to make new products, such as the recent Offer Ads beta, that connect businesses with customers in new ways. We do not have more details to share at this time, but will keep you posted.”

The Mashable site also has copies of the sales sheet that is being used to talk to businesses.

So will this be a success for Google? It almost has to be. The search giant cannot afford many more out and out failures in the social realm. It also has a new public face at the ready in Larry Page so things need to be different. Gone is the aloof “I’m so stinkin’ rich from this deal that reality is not an option” approach from Schmidt that was ticking off everyone as of late. Of course, Page is even wealthier but the hope is that because he is co-founder along with Sergey Brin that his take on the business of Google will at least look different and hopefully carry some co-founder passion ala Steve Jobs (although that is admittedly a big stretch).

So what are your thoughts of Goggle being in the daily deal game? Are you interested in checking it out? Do you think they stand a chance in the space or will this ‘offer’ just be another nail in Google’s social marketing coffin?

  • http://www.mosthost.net Chris

    The funny thing about this is how it contradicts Google’s own publicly available corporate mission statement. There, Google says the secret to their success in search is because of their focus. Clearly, the company has almost no focus on its current products and is belligerent in its belief that they can compete with anyone, any time, in any sector.

    Why not let Groupon have its business model? Google is scary with their willingness to compete against former, current, and potential future partners.

    • http://www.frankthinking.com Frank Reed

      @Chris – Times and market conditions change. I actually give kudos for Google deciding to go for he throat in the Groupon space. Groupon needs competition regardless of it being real or perceived.

      As for Groupon having its business model? Amazon backed LivingSocial and hundreds of others are already much further on board to take the ‘model’ (which outside of the massive salesforce is far from bulletproof) and run with it.

      Competition is good. Google’s struggles in search are evidence of what happens when there is one dominant player in a space. They atrophy. The lose their edge. Groupon is looking to cash out in the way companies did in the late 1990′s. Personally, I think people should get what they can while they can but what has been happening with the Groupon valuation and perceived value is unhealthy and reeks of opportunism that results in a Ponzi scheme like payout for those at the top and a lot of bag holding for the little guy.

      Just my 2 cents.

  • Cynthia

    Where I like Google is they have the potential to make a one-stop shopping type of deal portal. What you have now are deals at Groupon, and loyalty programs through a check-in service, and the social side of check-in at Foursquare but all of the retailers info, reviews, etc at a Google or Facebook Places.

    If Google can develop a site that combines deals with info with loyalty and checkins (and I think they can if they put in the effort) then they’ll have a leg up. If it’s just another deal site then they’ll be successful based how great the deals are at any given moment and that’s it.

  • http://twitter.com/#!/philsegal Phil

    @Frank bah, I totally agree with Chris :)

    I don’t pretend to know what’s going on in the minds of Grouponers, but I think Google’s recent behavior in the last year or two is ridiculous. For a company that is supposedly so committed to their core competency… well, they are pretty not-at-all committed. Is there any business model they *won’t* chase?

    If this were an isolated instance of trying to expand their reach, then it would be more understandable. But Google has been acting like a kitten chasing a string lately. Travel, Comparison Shopping, Video, News, Maps, Blogging, Photos, the Social Graph Group Buying… how many attempts at vertical domination am I forgetting?

    “Organizing the World’s Information” and “Not Being Evil” is starting to look more and more like “Attempting Domination of the Online World.”

    I think Greg Sterling said it best in his Search Engine Land post about ITA:

    “Yes, there are lots of ways in which Google can probably improve the travel experience but there’s a growing sense that the company doesn’t need to be in every business where there are consumer problems to solve.”