New Google Coupon Service Will Challenge Groupon

Maybe Groupon should have accepted Google's nearly $6 billion offer. Now Google is reported setting up Google Offers to compete against coupons from Groupon. Businesses are reported being signed up for Google Offers, which will also challenge Living Social. An analyst called Google Offers and coupon sites "a no-brainer."

Having been rebuffed in its nearly $6 billion offer to buy Groupon, Google has decided to set up its own social-coupon site. According to web reports, the new Google Offers service is gearing up for launch.
The service will closely resemble Groupon or Living Social. An e-mail goes to users who have signed up, offering the local deal of the day for a limited time. Once a sufficient numbers of users have signed onto that deal, it becomes available. There will also be options for sharing the offer through Facebook, Twitter, Google Buzz, and Reader.
Early Payment Is 80 Percent
According to the reports, the search giant is signing up businesses and has put together an operational and editorial team. Google is expected to pay 80 percent of the revenue to participating businesses within three days after an offer is posted, and the remaining 20 percent within 60 days, in order to cover any refunds.
A Google Offers fact sheet, posted on the Mashable site, notes that businesses only pay to spread the word about their business when the offer is purchased.
Other benefits cited in the fact sheet include getting the word out to more potential local customers, bringing in new customers, exposure across the Google ad network at no additional cost, easy management of offers and ROI , and quick payment with no out-of-pocket expenses.
Mashable has also posted a statement from Google that confirmed it is "communicating with small businesses to enlist their support and participation in a test of a prepaid offers/vouchers program." The statement added that this is part of Google's ongoing effort to connect businesses with customers in new ways.
Google's entry into coupons is only the next stage of the emerging coupon wars. Amazon.com has invested $175 million in Groupon -- and now Google Offers -- competitor Living Social.
'A No-Brainer'
Such social-coupon ventures, said Current Analysis' Brad Shimmin, are "a no-brainer." He added that "everybody wins" and there's no risk for any of the parties -- the customer , the business, or the social-coupon service. Shimmin pointed out that businesses can set a threshold for a coupon's activation, so they're not just "casting ad dollars" to see what they catch.
Instead, he said, businesses are "inviting the fish into the net." Shimmin added that "Google has always been very good at creating ways for ad dollars to be directed at customers interested in that product or service."
Since Google obviously has the resources to set up its own social-coupon service, the question is why it was so eager to acquire Groupon. Shimmin said it's because Groupon "already has a large number of business relationships set up," and the software giant would have been buying "a head start."
Shimmin said he expects Google Offers to be tied into location-based services so when enough people are physically near the same location, a special deal is triggered -- a kind of "flash mob" bargain.