What Does Google Offers Mean for Groupon?

發佈時間：2011-01-21
瀏覽次數：3714次

      It’s confirmed: Google is preparing to launch Google Offers, a direct competitor to Groupon. If you can’t buy them, join them.

      Google is already beginning the push for its new group-buying service, reaching out to local businesses for the first test run of its daily deals program. With its massive reach, vast advertising network and huge brand recognition, it’s very likely that the search giant will enter the local deals market with a bang.

      What does that mean for the current king of the space, Groupon? Should it be shaking in its boots and wishing it had accepted Google’s $6 billion acquisition offer? Or will Groupon find a way to prevail as it prepares for a $15 billion IPO?

Google Would Be an Instant Player


      For Google, the daily deals market is all about developing a stronger local advertiser network. Here’s what I said when the news about Google’s $6 billion offer to Groupon first broke:

    “If Google goes through with the biggest purchase in the company’s history, it will have the upper hand in local business advertising. That advantage could be so great that the courts stop this acquisition from ever happening. That’s why Google wants Groupon so badly that it’s willing to overpay by billions; if all goes according to plan, the search giant will be flooded with so much local advertising revenue that it will be able to buy a dozen Groupons.”

      Google already has a major advertising network through AdWords and AdSense, but it isn’t focused on local. Still, it’s a very good starting point for launching a daily deals business. By integrating daily deals into its advertising network, Google can quickly and easily gain exposure with businesses. In fact, it probably could get enough local businesses to sign up just through word-of-mouth.

      Getting users to Offers wouldn’t be a big challenge for Google, either. A simple link on the Google homepage would be enough to get the ball rolling, and promotions in local searches, Google Maps and more would help drive even more users. People don’t generally care where their deals come from, but Google’s name recognition automatically legitimizes the service.

      Google would need a sales force and a writing team, but not one as big as Groupon’s team. The Chicago-based company has over 4,000 employees and growing.

      Make no mistake: Google will be an instant player in this market.

Groupon’s Resiliency

      If Groupon has proven one thing though, it’s that this market is huge. It’s enormous. It has enough room for not only Groupon, but LivingSocial, which is on fire thanks to Amazon, and hundreds of Groupon clones of all different sizes.

      Groupon also has a huge head start, thanks to its massive sales force, home-grown name recognition and $1+ billion in funding. CEO Andrew Mason and his team have proven that they can outperform the competition, despite having a technology that can be easily copied. Google, on the other hand, has yet to prove that it can build a successful social product.

      The group-buying giant is also diversifying. It recently launched Groupon Stores, a self-serve deal platform so that businesses can create their own stores. It also released the Deal Feed to combat deal saturation.

      After spurning Google’s offer, Groupon had to be expecting today’s news. We doubt Groupon would have rejected Google’s offer if it didn’t have a plan for competing with them. While I admit that is my own hypothesis, Mason has proven more than capable of predicting major technology and business trends. I think it’s a safe bet to say that Groupon is prepared for (and not scared of) Google’s entry in its market.

Source from Mashable

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