Facebook Wades into Group Buying

It’s a natural. As long as I’ve known about Groupon I’ve thought that Facebook should be involved with social shopping and group buying. Now, according to Bloomberg (and other sources I’ve heard from this morning), that’s what’s going to happen:

The service will get started in San Francisco, San Diego, Dallas, Atlanta, and Austin, Texas, the company said last week in a statement. It will be part of Facebook’s existing Deals program, which lets businesses offer specials to users. With the new feature, Facebook’s staff will work with businesses to spotlight deals and encourage users to share them with friends.

“Local businesses will be able to sign up to use this feature soon, and people will be able to find Deals in the coming weeks,” the Palo Alto, California-based company said in the statement . . .

Facebook’s program will also let users see discount offers from partner services, including ReachLocal, Gilt City, Tippr, HomeRun.com, PopSugar City, KGB Deals, Plum District and Zozi.

Facebook could be immediately  successful as a deals aggregator, which would create a huge new potential source of distribution for third party deal vendors. That in turn could help some of the smaller players in the segment. The interesting question is whether Facebook will rely entirely on self-service to source its own deals or whether there will be any effort toward direct sales outreach.

In the near term I’m guessing self-service is the way they’ll go. Facebook is in a rare position to potentially make self-service work for (many) SMBs. Facebook does a really nice job educating SMBs about deals and offering best practices advice.

As you know, large numbers of SMBs have set up Facebook pages. And the Deals interface is very simple and intuitive. That will easily extend to daily deals.

A really provocative question is whether Facebook would offer more business-friendly margins to self-provisioning SMBs (as Groupon does with Groupon Stores, a self-service product). If Facebook were to take only, say 30%, of the value of the deal that would attract a lot of business and would be the thing that puts pressure on everyone else.

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4 Responses to “Facebook Wades into Group Buying”

  1. Julie Brosterman says at

    This is very interesting in light of a story yesterday from MA alleging that Groupon (and other offers) that include alcohol i.e. dinner with wine, etc. violate MA alcohol licensing laws http://bit.ly/h9hzGy.

    facebook permits promotion of wine, beer and spirits because you can use age banding in the set-up of who can view the page.

    I’m wondering if they will take this situation in MA into account or whether the offers will be open to include those with alcohol.

  2. Larry Chandler says at

    I would think it should be up to the individual business to decide if it’s legal to offer a deal. Obviously a Massachusetts business could not offer any deals on alcohol.

  3. Josh Stein says at

    Anything that pushes the margins down is a good thing if this is going to be a sustainable channel.  Flash-sales and group-sales for ’04, ’05, and ’06 slow depleters isn’t a business strategy for the longterm for anyone…

  4. Facebook Moving Fast on Deals says at

    […] launched Deals earlier this year and this week has entered the group buying and deals aggregation fray. Yesterday the company announced “push” notifications for deals (“deal […]

  5. Simon Baptist says at

    In the UK, it’s being reported that minimum spend to be able to book a deal is £50,000 (http://www.brandrepublic.com/news/1061111/facebook-charge-brands-deals-tool/).

    This seems to follow through to what I can see on Facebook (this might be different for others). That is, all roads for trying to book a Deal lead to a Sales Contact form.

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