Facebook will soon start testing a service to provide discounts and other special offers to its more than 500 million members, a move that will thrust the social network into direct competition with daily deals market leader Groupon.
The new service will be tested in Dallas, Austin, Atlanta, San Francisco, and San Diego, and will expand upon the social network’s existing service that offers deals to members when they use Facebook Places to check into a specific location, the company said.
Users will be able locate deals on special page listing all local promotions running at any given time, regardless of where they are at the time. Users will be able to find the deals page in the navigation bar on the left side of their home page.
Facebook said in a statement that the new service will let people buy deals on Facebook and share them with their friends.
“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,” the company said in statement.
The push into social deals was likely to step up pressure Groupon and rival LivingSocial, which lead the rapidly growing market but only have a small percentage of Facebook’s users.
Facebook said its sales team will soon start selling deals to local merchants. It also will team up with eight partners, including Gilt City, Tippr, KGB Deals and Zozi, to aggregate their deals on Facebook.
Facebook declined to clarify whether it will require members to use the company’s virtual currency, Facebook Credits, to purchase deals. The Palo Alto, Calif., social network has been pushing the use of Facebook Credits for the purchase of digital goods in games, for which it takes a 30% cut of revenue.
The virtual currency became the exclusive payment method for most of the games created by Zynga Inc., the top developer of Facebook games in 2010. The social network recently made it mandatory for all games developers to utilize Credits.
Facebook last week teamed up with Time Warner Inc.’s Warner Bros. to let members watch one of the studio’s movies, which they must pay for with Credits. Requiring users to buy daily deals with Credits would push the virtual currency beyond the digital realm and drive adoption among a much broader base of users.
Facebook spokesperson Annie Ta declined to rule out the possibility that deal buyers would be required to use Facebook Credits, saying the company was exploring different ways to purchase deals.
The 7-year-old social network has become the most visited U.S. website and is expanding its list of features and services as it adds users and attracts a growing stream of advertisers. Facebook in January raised $1.5 billion from investors led by Goldman Sachs Group Inc., a deal that valued the company at $50 billion.
I’m cool with more competition. Because the more that show up, the more likely it will be that I get one of them to offer a local deal in my little community. When I first heard of Groupon I was stocked! But when I found that they offered no deals in my area, I thought I was missing the boat.
But after doing a little research, I found http://steals4all.com which provides a list of daily NATIONAL Goupon deals that I can purchase regardless of where I live. So now I and anyone else in a remote area can take advantage of these huge discounts.
If Facebook brings local deals that are in my area and if they offer national deals as well. That would be awesome!
I think consumers are going to love the new Facebook Deals. It means more savings and discounts in more locations across the country.
Now that you can find coupons online, it’s easier to find the deals or sales you want. http://www.dailydealpool.com can help you find the best deals in your area by sending you a daily email with a list of sales in your area. This can be a great help in finding the discounts you need.