Commentary

Facebook Deals Joins Places On The Curb

FacebookThe other shoe dropped Friday when Facebook pulled the plug on its Deals offering just days after killing the mobile-only version of Places. As the demise of Places was welcome news to Foursquare, Gowalla and others so the end of Facebook Deals should provide a measure of relief to Groupon and Living Social--one less competitor to worry about.

Launched only four months ago, Facebook's daily deals service had been criticized for the quality of the offers geared to social events and group activities, the level of discounts and lack of aggressive promotion by Facebook. Considering the brief window of opportunity for Deals to gain traction, it seems Facebook wasn't prepared to go all out to prop up a non-core service until it showed signs of life. It was sink or swim. The same goes for Places.

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Facebook itself said it "learned a lot" from the test and will continue to try to figure out how to best serve local businesses. It is also maintaining Check-in Deals, which offer free mobile coupons users can get by checking into local venues via their handsets. (Facebook Deals are pre-paid coupons, purchased on Facebook with Credits or a payment card.)

What seems clear is that simply parking "Facebook" in front of a new product offering doesn't automatically make it successful, especially were it a me-too service banking on the site's massive audience to make it instantly viable. As Apple has shown in its history, if you want to break into existing markets, like those for mp3 players or smartphones, you have to introduce something that leapfrogs the competition.

Another approach is to partner with, or acquire, an established player in a given area, as Facebook did by teaming with Skype to launch video chat. Facebook CEO Mark Zuckerberg himself said at the Skype deal was "symbolic" of how the company would roll out new features in the future. "We want to leave as much as possible to independent entrepreneurs and companies who are going to be best in class at doing these things," he explained last month.

How that plays out in the mobile realm remains to be seen. Facebook has recently rolled out its Messenger app and is rumored to be close to launching a photo-sharing app to compete with Instagram. Will they wind up like Places and Deals? Both at least are closer to Facebook's core services of communication and content-sharing, especially of photos, than its half-hearted efforts to bolt on location and deals services.

And while it's natural for Facebook to try to extend its franchise in mobile via specialized apps, there doesn't seem to be a big appetite so far for free-standing Facebook offshoots. People want the Facebook app for social networking, Flipboard for reading magazines, Evernote for organizing content they create or collect, and Shazam for music discovery. Even longtime Facebook ally Zynga is looking to reduce its dependence on the site by releasing more mobile games that don't count on the Facebook ecosystem as much for success.

For now, Facebook would probably do best to focus on making its mobile offerings as user-friendly and consistent as possible across all devices and platforms rather than trying to duplicate the latest popular app. Above all else, it doesn't want to become the MySpace of mobile when it comes to its bread-and-butter: social networking.

3 comments about "Facebook Deals Joins Places On The Curb".
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  1. Jesus Grana from Independent, August 29, 2011 at 1:37 p.m.

    I just started getting daily deals from Amazon.com - sorry to say this but RIP Groupon

  2. Darrin Searancke from Halifax Chronicle Herald, August 29, 2011 at 2 p.m.

    Well - they tried. But I guess FourSquare has the market covered, huh?

  3. Roger Toennis from Liquid Media LLC, August 30, 2011 at 8:44 a.m.

    So although I am not personally a fan of Mark Zuckerberg around things like his opinions on privacy, what I do like is he seems to have a senior management team that can make quick, smart decisions.

    They very quickly learned that their business subscribers who use Facebook fanpages don't need any help giving out more discounts. And they see the wriitng on the wall now on the developing Groupon flamout and deep discounting hysteria.

    So they just killed Facebook Deals.

    They also figured out that the vast majority of Facebook users aren't very interested in the generic "Places" GPS check-in features as a core part of the FB social networking experience.

    The very small niche of the population that checks-in continued to use either Foursquare or Gowalla to do social check-ins (social check-ins are checkins that have nothing to do with getting a discount or coupon. They are "Look at me" check-ins) So most FB users havn't used Places for social check-ins.

    So they demoted it and reformatted it.

    What they are keeping from places is the Facebook "Check-in Deals" with an exclusive focus on getting coupons for check-in and a new way to search for those coupons local to you.

    So I think the author is incorrect here in saying this takes pressure off Foursquare and Gowalla. They still are directly competing with foursquare on the "deals for check-ins" model.

    In fact I think they way they are going to do check-in deals now is a bigger threat to foursquare than ever.

    Plus this also a big threat to Groupon as well. Looking at the Facebook check in deals around me right now in Denver I see discounts on the order of 15% to 25% and a few "bring a friend and buy one get one free" deals. Much more reasonable discounts for businesses AND HERE"S THE GROUPON KILLER, Facebook doesn't, at least I don't think they do, get a cut of any of the revenue to the business or get in the middle of the check-in deals in ANY WAY.

    So in reality this is a brilliant set of moves by Facebook. With these recents decisions they really pound both the Groupons and Foursquares of the world.

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