Los Angeles — As the online daily deals market is becoming crowded by the day, popular social media titan Facebook on Tuesday, finally launched its long-awaited deals service in five cities that will allow Facebook users to buy coupons for everything from a five-person banana split to a Pilates class for bridesmaids, a feature that will compete with start-ups such as Groupon and LivingSocial.
The special Deals coupons, enriched with the company’s social features, such as encouraging Facebook users to shop together directly on its service, offer discounted prices or access to limited-availability goods. Facebook will take a cut of each transaction, though the company declined to say how much.
Furthermore, any Facebook user can sign up for Deals notifications on the feature’s landing page now; The service will be available in five cities are: San Francisco, Austin, Dallas, Atlanta and San Diego.
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The social media giant also said that users in these cities will be able to see and use Deals shortly within a few hours of the launch. According to the New York Times, Facebook revealed that the local offers made to Deals users will be delivered via email and will also appear in users’ news feeds.
“While many Deals on Facebook offer discounts, it is more important to us that you find exciting experiences around you to do with friends,” Emily White, Facebook’s director of “local,” wrote in a blog post. “We have worked with partners and local businesses to help deliver the best social activities in your area. And once you have discovered a deal you like, having the deal on Facebook makes it easy to share, buy, and plan with your friends.”
Given the social media network’s reach, currently more than 600 million users, the benefits to business of offering deals via Facebook’s service may significantly trump competitors. It will differentiate itself from rivals and will be tightly knitted in the website, which will make it easy to share deals with friends to do together, see when a friend purchases something and find offers that your friends are interested in, White, wrote on the blog.
The most appealing aspect of the story, since Facebook already started allowing users to sign up for the service last month, is the use of Facebook Credits. In addition, Facebook’s first local deals product was unfurled as part of the company’s prevailing locations feature, Places. Mobile check-ins were also linked to deals; in this way, Deals served as an incentive for Facebook users to integrate Facebook Places in their daily lives–and there were also an incentive for marketers and major brands to put more money into the Facebook platform.
Interestingly, Facebook is letting people pay for the deals with Facebook Credits. So far, people had only been able to reap the benefits of Credits to purchase virtual goods for games or for some digital products such as movies. Now people can purchase a voucher to buy a physical product for the first time.
“Ultimately we are offering what we hope is a really great user experience by looking at what people come to Facebook to do, and that is interact with friends,” White said.
Moreover, Facebook has been known to take 30% on Facebook Credits purchases, though it is not clear if that same fee applies here. Although, the move could eventually move Facebook even further as an e-commerce platform.
Some of the initial new breed of Facebook Deals offers are a pair of tickets to a Wiz Khalifa concert, regularly priced at $82 for $38; a tango dance lesson that usually costs $15 for $9, and many others.
With deals, Facebook is diving into one of the Web’s most bubbling-hot daily deals market pioneered by Groupon a few years ago–but few with the reach of the world’s largest social media network.
Nevertheless, Groupon and LivingSocial have grown fast in part because they tapped into Facebook’s platform to advertise for new customers and to allow users to share deals with friends. But now, the companies will find one of their major marketing channels is also a potential competitor.
The social media giant also said that it has partnered with other deal companies including Gilt City, HomeRun, viagogo, zozi, Tippr, ReachLocal, PopSugar City, Plum District, OpenTable, kgb deals, and aDealio to make these discounts possible.
Barely last week, Google Inc began marketing a new daily deals service dubbed Offers to users in Portland, Oregon, with plans to expand to San Francisco and New York, and Amazon.com invested $175 million in LivingSocial in December.
Spokeswomen for both Groupon and LivingSocial declined to comment.
Some screenshots of the all-new Deals… Credit: (Mashable.com).