Google preparing to test Groupon fighter

By Dow Jones Newswires-Wall Street Journal
Posted Jan. 21 at 1:32 p.m.

Google Inc., after failing to acquire daily-deals Web site Groupon Inc., said it is preparing to test a competing service that offers deals to local businesses such as restaurants.

The Internet search giant, which on Thursday also announced that co-founder Larry Page would take over as chief executive from Eric Schmidt, didn’t release details about the new effort — Google Offers — that aims to grab a larger share of the small but growing online-ad market for local businesses.

Nate Tyler, a Google spokesman, said the company is “communicating with small businesses to enlist their support and participation in a test of a pre-paid offers/vouchers program. This initiative is part of an ongoing effort at Google to make new products … that connect businesses with customers in new ways.”

A person familiar with the matter said Google Offers is being led in part by Stephanie Tilenius, head of e-commerce at Google. The Mashable blog on Thursday reported about the offers initiative.

Last month, the Wall Street Journal reported that Google was turning to  phone calls by sales representatives to businesses such as spas, restaurants and hotels to get them to sign up for other Google advertising initiatives geared to local markets.

Google Offers comes after the company unsuccessfully attempted to buy Groupon in December, people familiar with the matter have said. People familiar with the matter have pegged Google’s offer at about $6 billion; both companies have declined comment.

Groupon, which received a nearly $1 billion in private investment after walking away from the Google offer, has been hearing proposals from investment banks about an initial public offering, people familiar with the matter have said.

The market for local business advertising online is heating up with players such as Groupon and LivingSocial. In the U.S., the audience for local deals sites grew more than 500 percent in December from a year earlier, according to comScore Inc.

Google has several initiatives related to local businesses, such as Hotpot, which lets users review businesses and get recommendations from the site, among other things. To reach local businesses, Google has also built relationships through Web pages it developed last year for them on its search engine, known as “Place pages.” Google has been selling two ad offerings called “tags” and “boost” to the more than 5 million businesses that have contacted Google electronically to verify the accuracy of their Place page.

Internal documents  leaked to blogs on Thursday and  confirmed by Google as authentic showed how the company was pitching businesses on Google Offers. A Google writing team will “craft a compelling write-up for your offer,” advertise the offer across Google’s online ad networks and send the deal to “local subscribers” to the Google Offers service, the documents said. The offer also would be showcased on a Google Offers Web site. The documents didn’t say what Google’s fee would be.

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One comment:

  1. Nora Jan. 22 at 11:30 a.m.

    Google is going to expand their consumer base a lot with their new Google Offers daily deal site. People already use Google for a lot of other services, so this is going to be great for them.

    Another great site to use to find daily deals and sales is They’ll send you daily emails with the best discounts in your area, ensuring you can always find a great deal.