Facebook Deals May Be Gone, But That’s Not a Reflection of the Broader Industry

Facebook Deals official last day was Sunday, but sources say the company’s withdrawal is not a bad omen for the industry.

Back in August, Facebook said it was going to discontinue its deals product, which offered coupons for local businesses in people’s main news feed. The actual shutdown occurred on Sunday, a company spokesperson confirmed yesterday.

Because Facebook decided to kill the program after being live for only four months, it was largely assumed to be a failure.

But our sources say that sales were meeting expectations, and that Facebook ultimately slashed the group because of limited engineering resources that could be used for better purposes.

One source said that it was a trial with a beginning and an end, and that in the end it wasn’t an actual strategic product of the company. Another source also said that Facebook wasn’t willing to contribute any more resources to it.

That could be true.

While it was relying on a small internal sales team and also aggregating deals from 11 other daily deal companies — including Tippr, ReachLocal, Gilt City and Zozi — in the future the daily deals game could come down to defensible technology.

Groupon and rival LivingSocial are no doubt pointing to Facebook’s withdrawal as evidence that the business is harder to replicate than people previously thought.

In the past week, both Groupon and BuyWithMe have rolled out technology plays that attempt to track consumers’ loyalty after they purchase their first voucher. All of the companies in the space, including newbie Google, are rapidly creating mobile solutions that will recognize when people are close to a deal and allow them to redeem it immediately.

In comparison, Facebook’s approach of allowing deals to show up in the main feed could appear dated with others moving much faster.

Not to mention that although you can consider Facebook’s departure as one less provider, there’s one new one to replace it.

Last week, Microsoft launched Bing Deals, which is aggregating deals from other major providers to help users browse, find and purchase them in one place. Ironically, that site is being powered by The Dealmap, which Google acquired in August.


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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik