Facebook is launching a deal site. Who isn’t? But according to Network Effect, Facebook is going to be specific about the kinds of deals they promote and that could be the key to success.
The word is that the deals on Facebook will only be for social activities that you can share with a friend. Half price movie tickets and lift freebies for a ski resort as opposed to discounts on teeth whitening and carpets for your home. Daily deal site KGB will be partnering with Facebook for a five-city test and they say their deal vouchers will be delivered in minutes. I take this to mean that I can sit down with friends on a Friday night, choose an activity and we can all be sharing that discounted fun later on that same evening.
By only offering deals on group activities, Facebook Deals is setting themselves up to be the go-to spot for social butterflies. It could easily become the dice roll for people who like to try something new every week. Bored? Check Facebook Deals. Bowling this week, a museum next week, the movies on a Wednesday night.
This niche strategy does mean they’ll have to turn down potential advertisers who don’t fit, but surely, there will be a dozen more lined up to take their place. The big question for advertisers is how much is Facebook going to take off the top? A somewhat related question is how is Facebook going to process the cash for these deals?
Facebook’s credit system is one available option but rumor has it that Facebook is working on becoming a financial institution like Paypal. If Facebook can deliver a monetary exchange system that handles “real” money, it will be a huge step toward turning the social network into a truly diversified internet powerhouse.
Facebook Deals is smart to stick with social activities that are made to be shared with friends and family. That is, after all, what Facebook is all about — connecting with others. And though the deals are seemingly aimed at groups of friends who gather together in the physical world, that’s not the only option. There’s a fun synergy about knowing that your friends in three different states are all participating in the same activity at the same time (thanks to the same deal). Add in the use of mobile Tweeting, photo and video sharing and even mobile webcams and they can all share in the experience in real-time. I suddenly feel like singing, “It’s a Small World After All.”
What do you think? Is Facebook’s idea of presenting only social deals a smart one or is that niche too narrow for flash deal success?