SAN FRANCISCO (Reuters)-Facebook started offering users in five U.S. cities coupons for everything from wine tastings on concert tickets on Tuesday, turning to the competitive heat in an increasingly crowded market.
The special offers, coupons, which Facebook users buy directly on the service may offer reduced prices or access to limited-availability of goods. Facebook will take a cut of each transaction, although the company refused to say how many.
With the new service is Facebook the most recent Internet heavyweight to jump into the glowing daily deals market developed by grouping a few years ago. Last week, Google Inc. began a new daily deals service called discounts for users in Portland, Oregon, with plans to expand to San Francisco and New York, marketing and Amazon.com $ 175 million invested in LivingSocial in December.
"Although the market has seen a tremendous growth and big players are already there, it's not something that is locked out," said Ray Valdes, analyst at research firm Gartner Internet.
"I expect to see churn among the suppliers if they try one thing and it works for a while and other suppliers new ways of better meeting users ' needs," he said.
Facebook, the world's number 1 social network with more than 500 million users, is betting that social interaction will help the apart from the dozens of companies currently provide online daily deals.
The coupons available on Facebook are specifically focused on the activities of the group, such as a river rafting trip, and not for individual items such as a cheap pair of jeans. Facebook users can easily recommend interesting-looking deals to their friends on the service.
"It's not about someone else's business model and force-fit within Facebook," said Emily White, Director of local products on Facebook, Reuters in an interview on Tuesday.
"Ultimately we deliver what we hope is a really great user experience by watching what people come to Facebook to do, and that is interacting with friends," she said.
Facebook is currently the majority of its revenue by selling online ads. But some analysts see a major new business in helping local merchants acquire new customers by offering online coupons that of mobile technology and social networks benefit from it.
"The local opportunity for what Facebook, Google and Groupon, what everyone trying to figure out, possibly greater than the possibility of online ad now," said analyst Ken Evercore Partners Sena, who recently wrote a report about the mobile shopping market.
In addition to Facebook's inherently social networking features, Sena said the company's online payment system, called Facebook Credits, gives the company a significant advantage selling coupons on its service.
Google, on the other hand, will benefit from its mobile technology, including wireless transaction capabilities recently included in its Android software, said Sena.
"All those pieces will come together to determine who is the leader in the space. It is very undecided at this point, "he said.
Facebook is essentially offers service roll-out in San Francisco, Austin, Atlanta, Dallas and San Diego. White said she expected that Facebook offers to be available in more cities in the us this year, although they denied a time frame.
In addition to creating coupons for local businesses with its own sales force, will Facebook coupons created by 11 partners, including ReachLocal, Gilt city and Zozi offer.
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