Former Yahoo Execs Launch Daily Deals Social Network
Yahoo veterans Nick Weir, Usama Fayyad and Hunter Madsen have formed a daily deals social site that allows consumers to create their own personal deal network with friends, stores, brands, product categories and loyalty programs. The site, announced Tuesday, goes live in midsummer.
ChoozOn works much like Facebook and LinkedIn, but this social network focuses on daily deals by allowing consumers to opt in and share information with brands. Consumers choose from a list of brands and categories to manage alerts, browse and search, as well as hunt for deals.
And it already has a rival: Facebook Deals launched its service at midnight in a test in five cities: Atlanta, Austin, Dallas, San Diego, and San Francisco. Deals, which can spread via email and the News Feed, will focus on activities done with friends.
ChoozOn service operates under the assumption that consumers are overwhelmed by daily deals and brand loyalty and personalized promotions can spur spending. ChoozOn estimates there are more than 250,000 online offers from more than 300 Groupon clones supporting about 7,000 stores and services. None, however, base the deals on loyalty programs.
The site fosters community and shared interests among members. "The site built on intent is based on a social structure," according to Hunter Madsen, CMO at ChoozOn. "I can also save the deals into files."
Sharing product-interest and personal information with brands gives consumers access to special offers especially tailored to them. ChoozOn also offers a "Deal Clubs," a section of the site where one member can start a club, others can join, and all can hunt for deals to share related deals based on the focus of the group.
A function allows members to search the site for brands they like, such as Apple, Best Buy, Home Depot, Hewlett-Packard, and Sony. A color-coded system in the social site lets members tell the brand they have interest in its products. Marking a brand with a green tag, for example, signifies the member chose to start a "relationship" with the brand. An "i" in the tag identifies that the brand offers more information such as a customer loyalty program.
More than 300 merchants have signed on to distribute offers through the social site when the service launches this summer. ChoozOn will take between 3% and 4% of the sale, the amount varying based on the brand's product and the complexity of the transaction. All purchases will be handled through Commission Junction, Google, and others.
Although ChoozOn provides its own spin on the daily deals service model, it will still need to compete with Google, which launched Offers last week, and Groupon, which poached Google executive Margo Georgiadis as its new chief operating officer. She will oversee Groupon global sales, marketing and operations.