Facebook Is Latest Rival to Groupon and LivingSocial

Facebook said late Monday that it would introduce Deals, an effort by the social networking giant to tap into the consumer frenzy over online discounts. With Deals, which had long been expected, Facebook is entering a crowded market led by overnight sensations like Groupon and LivingSocial.

Starting Tuesday, Facebook is releasing Deals as a “test” in five cities: Atlanta, Austin, Dallas, San Diego and San Francisco. The company, which has more than 600 million members, said it hoped that its ability to tap directly into the communications and activities of networks of friends will help it offer a more compelling service than rivals. It will be easy to share deals with friends, see when a friend buys something and find offers that your friends are interested in, said Emily White, Facebook’s director for local. Facebook will focus on offers for things that are best done with friends, like concerts or events, she said.

“You can receive Facebook deals via e-mail,” she said. “But if there is a deal that is good for you, it will likely show up in your news feed at some point in the day.”

While many other coupon sites allow users to log in with their Facebook name and share deals with friends, Ms. White said Facebook Deals would become more tightly woven into the site.

“A lot of deal sites get that deals are social,” Ms. White said. “But I wouldn’t say they are really well integrated with Facebook.”

Facebook’s plan to introduce a rival to Groupon and LivingSocial has long been known. Last month, the company began allowing users who want to receive offers via e-mail to “Like” the Facebook Deals service.

Deals may well be a boost to another important Facebook program: Credits, the company’s virtual currency. Users will be able to buy Deals with a credit card or with Credits. Until now, Credits could only be used to buy virtual goods inside games and some digital products like movie rentals.

“It is first time it has been used to purchase a voucher that is redeemable for real goods,” Ms. White said. Facebook has made no secret of its plans to turn Credits into a major force in online payments.

Facebook will rely on its own sales force to find businesses interested in offering Deals. It will also tap other services that offer deals, including OpenTable, which focuses on restaurants, PopSugar City, which tailors offers to women, and Zozi, which focuses on outdoor activities like kayak excursions or wine-tasting tours.

[Source : bits.blogs.nytimes.com]