Google is preparing to launch its own group-buying service — Google Offers — to compete with Groupon. The internet giant recently tried to buy Groupon for $6 billion but was spurned, and Groupon is now getting ready for a $15 billion IPO. Google Offers will work like Groupon and LivingSocial, emailing users daily alerts about bargains in their area. Can Google's Groupon clone beat the original? (Watch a report about Google Offers)
No way. Google will not top Groupon: Google Offers is "no Groupon killer," says Greg Sterling at Search Engine Land. Groupon has a huge head start, with 50 million email subscribers. If Google's version is "very successful" it could eliminate some of the more than 100 smaller companies offering daily deals, but would still have to contend with Groupon and LivingSocial. And if Google doesn't build its service well, "it could flop."
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Google Offers will need to be shrewdly competitive: Google had little successwith its earlier bargain business, Google Coupons, says Lisa Barone in Small Business Trends, but it can knock Groupon off its pedestal if it's "smart." For example, Groupon takes 50 percent of the profits from its deals as a fee. If Google charges a "much smaller commission rate," it can snare the best business partners, and the best bargains, and "establish market dominance."
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This is a gamble for Google, but one worth taking: There are already "dozens of Groupon clones out there," says Ryan Singel in Wired, and Google might quickly discover that nobody "wants to sign up for another daily email." But it's worth a shot — Google is so keen on extending its reach into local advertising markets that it was willing to shell out $6 billion for Groupon. If it can integrate Google Offers deals "into its popular online apps or ads," Google could "super-charge its efforts to be the leader not just in search ads, but in mobile ads as well" — even if it doesn't take down Groupon.
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