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Google Going Head-to-Head with Groupon



By: STEPHEN ARBIB  
Published: January 20th 2011
in Economics » World

Google vs. Groupon

If you can't buy them, beat them.  That's Google's philosophy when it comes to Groupon.  

 

The search giant recently tried to buy Groupon for $6 billion and got their offer rejected.  Instead of sulking, they decided that they will go head-on against Groupon by launching their own similar service; Google Offers.

 

Mashable has obtained a document straight from the Googleplex, showing the company's new service.  The fact sheet states, "Google Offers is a new product to help potential customers and clientele find great deals in their area through a daily email."

 

If you aren't familiar with the way Groupon works, its quite simple really.  Users provide their emails to Groupon and receive daily deals via email which are local to their area.  They are then given a specific amount of time, usually 24 hours, to make the purchase.  Depending on the business offering the service, they may require that a certain amount of customers purchase the deal before it's valid.

 

Therefore, the value for Google was never the technology behind Groupon, as that's quite easily to replicated (similar, ready-to-use services can be purchased for less than $1,000). The value lies in the database and the data which Groupon has collected since it's launch. However, with Google providing their own service, they are quite likely to develop a similar valued database in a fraction of the time.

 

For Google, the cross integration with AdWords is obvious.  They could offer companies discounted rates for advertisement if they provide Google Offers with attractive discounted deals to their customers.  Their brand and reach could quickly change the landscape of this industry.

 

Or, it could just become another Google Wave, Google Buzz, or Orkut (yeah, I don't remembers that one either).  But in this case, I would bet on Google to succeed.  They have too much leverage and power in this field to fail, and the formula and lack of barriers of entry will make it easy for them to flourish.  



Related articles: (Google, Groupon, Offers)
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