• by Mark Walsh  @markfwal, May 2, 2011

AT&T plans to roll out its answer to Groupon and LivingSocial in the next few weeks in Atlanta, Dallas/Fort Worth and Los Angeles to start, before expanding to additional cities. To kick-start the effort, the telecom giant began offering people who register today through its YP.com (previously YellowPages.com) directory a $10 credit toward their first deal-of-the-day purchase.

AT&T earlier this year disclosed plans to enter the rapidly growing daily deals market, which is expected to reach $1.25 billion this year and increase to nearly $4 billion in 2015, according to a BIA/Kelsey forecast in March. Facebook became the latest major Internet player to join the daily deals frenzy with the launch of Facebook Deals, focused on providing special offers and discounts tied to events and social activities.

Google, Yahoo and major newspaper sites are among others seeking to challenge Groupon in the deals space. The much-publicized startup popularized daily deals by offering discounts via email for 35% to 50% off normal prices on everything from facials to restaurant meals to concert tickets in local markets across the country. The company is planning an IPO that would value it at an estimated $15 billion to $20 billion.

Although it is a relative latecomer to the deals space, AT&T has said it believes it can be a "fast follower," in part because of its long-standing relationships with small businesses nationwide through its 5,000-person-strong local sales force. AT&T plans to offer a deal a day in each YP.com local market.

The company will also deliver deals via mobile devices, but an AT&T spokesperson speaking to Bloomberg Monday declined to specify any businesses that would participate in the initial trial. The new daily deals section of the YP site, however, indicates that the program will include national and local deals.

At least one expert believes it's not too late for AT&T to get in the game. "We're only in the second inning of the deal-of-the-day game, so there's plenty of time for anybody to jump in," said Gordon Borrell, CEO of local media research firm Borrell Associates. "This is a perfect complement to the Yellow Pages offering, both online and offline. It adds a great deal of currency to what is generally a static product."

In its annual benchmarking study released in March, Borrell ranked YP.com as the top local online media company, with nearly $1 billion in revenue last year. Groupon was third, after Autotrader.com, with almost $500 million. That figure is expected to surpass $1 billion this year.

The YP.com home page already prominently features a "Coupons & Deals" section that points users toward local discount offers on products and services online including groceries, auto repair and electronics. Participating merchants include national retailers such as Kmart, Safeway, RadioShack, Walgreens and 1-800-Flowers.