Facebook is getting rid of the daily deals business following four months of release, a move that may remove some rivalry stress on industry leaders Groupon and LivingSocial.
Its closing follows Facebook’s discontinuation initially this week of its placing-based check-in feature for mobile users in favor of wider place-classification tools. Facebook reported that after testing deals for four months, we have resolute to close our deals product in the coming weeks. We believe that there is huge amount of power in a social approach to moving people into local businesses. We have gained a lot of experience from our test and will carry on evaluating how to best serve local businesses.
Deals was one of Facebook’s mainly undifferentiated products, it was a nearly ideal model of offerings from Groupon, LivingSocial, Google and others. Facebook’s effort at a novel twist was that its deals were products which the users could do with their friends, and that it syndicated deals from other suppliers including Gilt City, HomeRun, and OpenTable. Users could also pay for Deals utilizing Facebook Credits, though Facebook has kept its payments product is chiefly for games on its platform.
Facebook’s departure means Groupon has one less main rivals it sets up for a $750 million initial public offering later this year.
It is amazing that Facebook closed their deals product after just four months, Vinicius Vacanti commented, co-founder of Yipit.com, which records daily deals and tracks the industry. On the other hand, Facebook Deals had been an underwhelming time and knowledge.
Though, Facebook’s choice not to follow the business may mean the firm thinks the approach require merit.
The Groupon group purchasing phenomenon is an asset. There are no hurdles to come in this level. It’s just not happening to work because everybody presents it and therefore the margins go less, Jeremiah Owyang suggested, a partner at research firm Altimeter Group.