Google + The Dealmap: What to Make of It

Yesterday I found out that The Dealmap was being acquired by Google. I was not surprised by the acquisition. I had privately been telling Dealmap CEO Jennifer Dulski since its inception that Dealmap would be bought; the only question was by whom. I was just surprised Google was the buyer:

In our first year alone, The Dealmap grew to more than two million users of our web, mobile, social and email products, and more than 85 million monthly visitors to our partner network. The journey that has led to this outcome has been an invigorating and rewarding one, and we are very proud of the innovative products and industry “firsts” we’ve created along the way.

We believe Google provides the ideal platform to help us accelerate our growth and fulfill our mission. We’re passionate about helping people save money while having great local experiences, and in Google we’ve found the perfect partner that shares this passion, as well as our vision and strategy. We believe that joining Google will help us innovate in new and unexplored areas of commerce.

Most of the coverage yesterday was fairly superficial, focusing on the basic details and how Google was challenging Groupon with the purchase. I spoke to a Google PR person late yesterday (after I got back from vacation) and had a very general conversation on background. The official comments were basically the flip side of the second paragraph above:

We are impressed with what The Dealmap team has accomplished and excited to welcome them to Google. We’ve been thrilled with the early success of our commerce offerings, and we think they can help us build even better products and services for consumers and merchants.

Earlier this year I wrote:

This company is ripe for acquisition. Possible buyers include IAC, MSFT, AT&Ti (maybe GOOG or Y!) or a major newspaper company (Hearst, McClatchy?). The company will be bought so if you’re a corp dev. person and potentially interested I’d act sooner rather than later.

Google was a “maybe” buyer in my mind; I had assumed that Microsoft or AT&T Interactive or IAC or a newspaper would buy The Dealmap before Google thought of it. But Google acted first. However I don’t know what The Dealmap acquisition price was or if there was any competitive bidding.

One could see The Dealmap as a complement to Google’s coupon/deals strategy but equally as a hedge against direct sales. Deal and coupon aggregation has always been a natural strategy for Google, much more than direct sales to SMBs.

Last year I heard an unsubstantiated rumor that one of the Google co-founders didn’t personally like coupons and so Google’s approach to local coupons was ambivalent or lukewarm, until Groupon showed the way. In November 2009 (and several times before that) I criticized Google for not being more aggressive in the local coupon space:

Google could have “owned” the online coupon space but it has failed to be very aggressive in this area for reasons that aren’t entirely clear, although there’s no revenue that flows as a result of coupon creation by local businesses.

Regardless it’s interesting to consider how The Dealmap might affect Google’s Offer and Wallet strategies.

The Dealmap has an API and quite a wide range of partners (more than 50), including CityGrid/Citysearch and Microsoft. Google will continue to honor The Dealmap’s contractual relationships through their conclusions. Whether such deals will be renewed is much less certain. However I believe Google will maintain The Dealmap’s API.

I could also see Google Offers showing up in AdSense (possibly with a CPA model in some cases). Coupons.com has a similar model that has been quite successful.

I would also expect that Google will make as many of The Dealmap’s aggregated offers as (legally) possible savable to Google’s “My Offers” and available through the Google Shopper mobile app — eventually integrating all that it can into Google Wallet.

The Dealmap will make Google a much richer place to find local and national deals — something the company could have done itself if it had seen the market more clearly a few years ago.

The addition of Dulski and co-founder Chandu Thota, among other key personnel, to Google’s local team is equally significant. Dulski was the head of Yahoo Local briefly before leaving to become CEO of what was then Fatdoor and became Center’d. Though well-conceived Center’d was effectively an “also ran” local search site with some pretty strong search technology. That technology and Dulski’s vision was the basis for The Dealmap, which overwhelmed Center’d and became the primary focus for her team.

With this acquisition Google unquestionably cements its position in the top tier of deal sites. And for those interested, here are some other independent deal aggregators still in the market:

  • Yipit
  • Savings.com
  • Analog Analytics
  • Local Offer Network

Here’s my original post on The Dealmap.

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8 Responses to “Google + The Dealmap: What to Make of It”

  1. Siva Kumar says at

    Nice analysis!  A complementary news item is that Google Ventures just invested in a coupon and deal aggregation company, Whaleshark, which is a rollup of several sites including Retail Me Not.

  2. Greg says at

    Yes I saw that

  3. Edward says at

    Reminds me of the Applied Semantics acquisition of 2003.

  4. Greg Sterling says at

    Edward:

    It could become like that or flow into that stream of ads pretty easily. I didn’t even talk about mobile, where this will have big application potentially.

  5. Edward says at

    Agree, huge distribution opportunity and lots of data.

  6. In Antitrust “Complaint Du Jour” French Daily Deal Company Files Claim Against Google says at

    […] allow it to market through AdSense because Google is now in the deals business (with Offers and its recent purchase of The Dealmap) and wants to marginalize or eliminate competitors. Yet a quick search for “les deals,” […]

  7. Michael Imbleau says at

    Dealmap no longer accepting new sign-ups for API keys.

    http://www.thedealmap.com/api/keys/

  8. Greg Sterling says at

    Michael:

    Very interesting. Wonder if they’re just stepping back or whether this indicates that they won’t be maintaining the API over time. 

  9. As Others Scale Back, Google Ramps Deals Program says at

    […] that Google is quite committed to daily deals — at least for the time being. The company recently bought deals and coupons aggregator The Dealmap and yesterday promoted Google Offers on its homepage. The […]

  10. Ryan Garey says at

    Fascinating, but not surprising, Google just bought another coupon network… http://zavenetworks.com/ – it’s going to be fun watching how this all shakes out.

    Just wish they would have left dealmap’s API open.

    Ps. Is obligatory, coincidental, lack of language diversity, or just good form that these acquisition announcements all begin with “We are delighted…” … I mean, I know I would be!

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