Facebook Is Testing New Local “Deals” Offering in Five Cities

In a move designed to attack the market segment dominated by collaborative buying deal sites such as GroupOn and Living Social, Facebook today introduced what it calls an “alpha” version of Deals for local markets. (In a release last fall, it announced “Deals” delivered only on mobile devices in conjunction with Facebook Places.) Facebook will have to scramble to build the network of local deal providers required to compete with the incumbent players, but there is no doubt it has the potential buyers already within its membership. Facebook is seeking “Deals” in the domains of spending on shared experiences, such as dining out or attending a show, in order to maximize the value of its social network; one can, for example, easily share or forward a deal to a potential companion for the event.

According to Tom Cheredar in VentureBeat, “The Deals launch will also be the first major push for Facebook’s virtual currency, Facebook Credits. Users will use credits to purchase offers from its Deals service.”

This application of Credits is not quite the “real-world” crossover that some have been predicting; in fact, one is only purchasing a voucher for a deal. The depth of the discounting from merchants has not been revealed, nor has the notional “exchange rate” arising from the use of either Credits or credit cards to purchase deals in Facebook.

Click here to read the story: http://venturebeat.com/2011/04/25/facebook-launches-deals/

Click here to learn more from Facebook: http://www.facebook.com/deals/business/
Click here for the blog: http://bits.blogs.nytimes.com/2011/04/25/facebook-is-latest-rival-to-groupon-livingsocial-facebook/