Facebook Enters Deal-of-the-Day Arena with Facebook Deals

By Tracey E. Schelmetic March 15, 2011

The deal-of-the-day. From the number of sites that offer this discount craze nowadays, from Woot.com to Groupon to Living Social, you'd think we're addicted to offers of 62 percent off tai-chi instruction or half-price Macedonian food. But going by the old Web business model that “too much is never enough,” Facebook has decided to toss its hat into the “deal of the day” ring by expanding its existing Facebook Deals service to include the bargain of the day.

The service will let people share discounted offers with their friends, Facebook said in an e-mailed statement. The service will be introduced first in five cities, including Atlanta, San Francisco, San Diego, Dallas and Austin, Texas, said Bloomberg.

“Local businesses will be able to sign up to use this feature soon, and people will be able to find Deals in the coming weeks,” said Facebook.

So why the desire to get into an already pretty crowded marketplace? If you believe the analysts, the market is big and going to get bigger. The “deal of the day” industry will grow to $3.93 billion in 2015 from $873 million last year, according to research and consulting firm BIA/Kelsey, representing a 35.1 percent compound annual growth rate (CAGR).

According to BIA/Kelsey's research, there are over 200 players, from small and regional to large and national, in the social-networking-based daily discount arena. “Deal a day has experienced incredible growth during its three-year incubation period beginning in 2008,” said Mark Fratrik, vice president of BIA/Kelsey. “We expect this to continue as companies in the space are rapidly adding markets and increasing total user count. They are also subdividing existing metros to provide deals closer to where users live, which we believe will help offset any drop-off that may occur due to consumer fatigue as the novelty of the form fades.”

Of course, Facebook isn't the only giant to be getting its feet wet in the deal-of-the-day business model. Google announced back in January that it would be launching a service called Google Offers, news first reported by Mashable. Google's launch of an organically grown deal-of-the-day component follows a failed attempt to purchase Groupon for $6 billion late last year.

Tracey Schelmetic is a contributing editor for TechZone360. To read more of Tracey's articles, please visit her columnist page.

Edited by Tammy Wolf

TechZone360 Contributor

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