Facebook on Tuesday started offering users in five U.S. cities daily shopping deals, becoming the latest competitor to enter an already "crowded market" dominated by Groupon and LivingSocial. Facebook is betting its popularity and its role in connecting people will help it create "a more compelling service than rivals," says Miguel Helft in The New York Times. Instead of focusing on items like discounted clothing, Facebook Deals with be geared toward travel, concerts, wine tastings, and other activities friends can do together. Does Facebook's program — now available in Atlanta, Austin, Dallas, San Diego, and San Francisco — have what it takes to be a Groupon-killer?
Yes, Facebook's social approach makes sense: It's smart for Facebook to emphasize social experiences rather than just compete to offer the deepest discounts, says E.B. Boyd in Fast Company. Businesses can't keep cutting their prices to attract new customers, so many daily deal services will soon "start to crumble." Focusing on things friends can do together "fits with Facebook's core mission and core strength."
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