Facebook's Response to Groupon Launching Tonight? Probably!
Facebook will be introducing its response to the group-buying phenomenon tonight when it rolls out deals in five cities around midnight.
The timing of the launch leaked out early when the New York Times accidentally published its story early and then promptly took it down.
In a cached version of the story, which is also available in RSS feeds with the words “embargo-till-midnight/” in the URL, explains that the test markets will be Atlanta, Austin, Dallas, San Diego and San Francisco. UPDATE: The story now has been published officially.
A lot of details on how Facebook Deals planned to operate and how it anticipated rivaling others, like Groupon and LivingSocial–or even Google Offers, which launched last week–have been available for some time.
The one noticeable aspect that the unpublished article confirms is that users will be able to use Facebook Credits to pay for the offers.
Up until now, Credits have mostly been used for virtual goods inside of games, or for some movies. Facebook typically takes a 30 percent cut from those transactions, but it’s unclear whether that will continue to hold true for these deals as well. Users will also be able to pay by using a credit card.
So far, the economics of group-buying on other sites would in theory support Facebook taking a 30 percent cut. Typically, a merchant offers its services for 50 percent off, and then gives the company that generated the lead 25 percent of those revenues.
It was already announced that Facebook had signed up nine partners: Gilt City, HomeRun, OpenTable, PopSugar City, Tippr, KGB Deals, Plum District, ReachLocal and Zozi.
Facebook’s goal is to focus on group activities and to make it easier to share deals with friends when they see a friend purchase something.