Google has had a busy summer so far. With millions of social network connections being made through Google+ (officially launched last week), you’d think that Google would take a bit of a break and watch the numbers roll in for a while. Not likely.
Google Offers, the web-based and very Groupon-like deal-of-the-day service offering from Google was launched to some fanfare at the end of May, with its first offer live on June 1st in Portland, Oregon.
The launch last month went well, by all reports. Powell’s Books, a chain of bookstores in the Portland metropolitan area sold 5,000 “deal offers” in just a few hours. As just one aspect of their beta trial, most would call that a success. But it was only one city.
In an article at the Washington Post, Eric Rosenblum, Director for Google Offers, said that the Portland trial went well and that Google’s intention “was to start learning how to source great deals, provide excellent merchant and customer service and deliver value to our customers.”
Rosenblum went on to say that the majority of the Google Offers either outperformed or were in-line with their expectations. And given their successful showing in a market that is almost entirely owned by Groupon, the only logical thing to do next would be to expand. And that’s exactly what happened.
In the last week, Google Offers has opened their deal-of-the-day services to San Francisco and New York City (splitting the latter into three major service areas). The website is actively calling for businesses to partner with Google Offers and listing details for their next targeted cities: Austin, Boston, Denver, Seattle and Washington D.C.
So, it’s obvious that Google is making all of the right moves. A savvy tech watcher may expect Google to integrate Google+ with both Google Shopper and Google Offers for a huge crossover service offering to users of Google products. But it would also seem that Google Offers has a lot of catching up to do, yes?
In 2008, Groupon launched in Chicago and expanded quickly to Boston, New York City, and Toronto. By the end of 2010, Groupon had established its services in more than 150 markets in North America and 100 markets in Europe, Asia and South America. Groupon has registered over 35 million subscribers.
LivingSocial, another big player in the deal-of-the-day game, launched its first deal in July of 2009 and has seen a good bit of success. LivingSocial has deal offerings covering more than 240 markets in over 12 countries. The latest tally has Living Social sitting pretty with 26 million e-mail subscribers and a value of over $3 billion.
Given that the numbers show an extreme barrier to entry in the deal-of-the-day market, who could compete with – or even think to topple – giants like Groupon and LivingSocial? You’d think that a company like Google, with fingers in nearly every online market in the world, would be the only one to see any chance for success. You’re probably right. And Google is betting on it heavily.
Therefore, it would stand to reason that Google is planning to move fast. The current Google Offers advertisements say “From food to fun, Google Offers has great deals at places you’ll love. Subscribe now to receive unbeatable Offers straight to your inbox.” And if you want to know when your city will be among those to see deals from Google Offers, you can sign up for an e-mail notification.
So how does Google Offers compare to the other deal makers? It may be difficult to make a direct comparison to either of the big players, as each of the companies runs their deals differently (at the moment). Groupon runs multiple deals each day. Google only offers one. LivingSocial also only sends one daily deal to subscribers in each market but with multiple travel deals offered as well. Many of Groupon’s deals will run for several days at a time. On weekends, Google Offers will run a deal that lasts for two days at a time as well.
There are differences and similarities, sure. But remember, this is all still very early for Google. Much like with the Google+ Project, users can expect to see changes in the service offerings as Google puts its brightest minds to task on figuring out how to best serve the needs of the markets and dominate.
The Power of Google:
It’s an easy assumption that those who sign up for Google Offers notifications in their cities won’t have long to wait. With Google’s extensive reach and massive name brand recognition, all they have to do is flick the switch, turn on the power and they’ll see their markets light up.
As an example: Google recently announced that their Google+ Project had gained over 10 million users in just two weeks after it was launched in a trial phase. That’s strength, folks.
Going into the deal-of-the-day market, Google is fortunate to have $57 billion in assets at their disposal and 24,000 of the brightest minds on the planet working for them. It would seem that mounting these otherwise considerable barriers to entry is not much of a consideration for a company as large as Google. For them, it may prove no more difficult than stepping over a crack in the sidewalk.
Perhaps Groupon and LivingSocial should be leery of Google’s take on their business models and brazen entry into their markets? Maybe. Some experts suggest that Google Offers has Groupon in their sights – given that Groupon Founder Andrew Mason so flagrantly tossed back Google’s offer to buy his company for $6 billion months ago.
For Google, it’s Go Time. For the speculators, it’s a fun game of wait and see. For the markets, it’s more competition that serves to drive the bargains and the savings. Win-win.