Facebook finally launched its new Social Deals feature today, but only in five cities in the U.S. Facebook had previously unveiled a Deals service based on check-ins to Facebook Places, but it's been long expected that they would go more for the Groupon space.
That space is getting more crowded, and many are wondering if Groupon can maintain its lead. LivingSocial is nothing to shake a stick at either, and there are plenty of smaller, deals sites aimed at specific local markets and verticals. Then there's Google. It seems unlikely that any one company will be able to dominate here like say search or social networks.
That said, if anyone can, you'd have to wonder if it would be the dominant search engine or the dominant social network. Both Facebook and Google have huge advantages over rivals, given their enormous user bases, and the ability to insert deals where users already are.
Google just unveiled Google Offers last week. It will involve email just like Groupon, but Google has a lot of other weapons it could potentially use, with Place Pages, AdWords, Gmail, Latitude, etc.
With Facebook Deals, users will also subscribe to emails, but they can also appear in the news feed. That's one area where Facebook should have a huge leg up on Google and anyone else.
Facebook is starting with Atlanta, Austin, Dallas, San Diego, and San Francisco with the Deals space. It's being called a "test" but there's little doubt that this will be a full-blown product for Facebook.
Businesses are still getting used to Facebook marketing. Getting seen in the news feed is perhaps the most important part of that. This week, Facebook marketing firm Buddy Media released a report, giving brands tips for capitalizing on Facebook's EdgeRank algorithm (the basis for what Facebook shows users in their news feed).
Deals will present a whole new option, and deals in general have already proven to be massively popular among consumers. Many Facebook users check their news feed multiple times throughout the day, which should ensure conversions, as long as the deals are attractive.