by Kristin Burnham

Facebook’s Rumored “Deals” Service: A Done Deal or No Deal?

Oct 29, 2010
Enterprise Applications

Rumors say that Facebook is testing location-based deals. Could the social networking giant be moving in on Groupon's territory?

There’s no doubt that Americans love a good deal, and social buying sites such as Groupon, LivingSocial and Qponus have capitalized on that market. Not one to be left behind, it now appears that Facebook may be getting in on the action. reported yesterday that Facebook is testing a new “Facebook Deals” service that lets businesses promote special offers when visitors check in to a store. According to the report, Facebook is testing the service with a limited number of partners. obtained an e-mail from a company whose deal has supposedly been approved. The e-mail, from a Facebook rep, notes the specifics of the deal (which requires that you tag three of your friends at the specific place to receive the free item) and lists instructions for the business to track deal activity. It also lists the URL as a page where the vendor can learn more about check-in deals. (That page appears invalid right now, though.)

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Back in August, Facebook rolled out its own location-based service called Places. The announcement was met with speculation that Facebook’s enormous user base could spell the end for other location-based services, primarily Foursquare.

Since then, adoption of Places seems to have slowed. In my personal News Feed, for example, rarely do I see someone update their status with a location. This can probably be attributed to Places’ lack of incentive (until now, perhaps), which was the model Foursquare was built on.

But pairing Facebook check-ins with incentives—in this case, Facebook Deals—is smart. Not only will it drive more Facebook users to try the mobile feature, but it’s a smart way for brands to promote their business.

[Location-Based Services: 5 Myths Debunked]

Could Facebook Deals endanger other social buying sites such as Groupon?

Absolutely. Facebook Deals have two things the other sites do not: First: It’s a smart marketing ploy. To receive a deal, Facebook users will be required to tag other Facebook users, which makes them aware of the brand and the deal (and will require them to do the same if they want to take part). Other deal-of-the-day sites require only that you log in to purchase it, and give you the option to tell others about it.

Second: Facebook’s millions of users—if Facebook Deals do roll out to the public, they have an instant and attentive audience, not to mention the demographic information to which they can target personalized deals.

What do you think about the possibility of Facebook’s deals? Will you participate or opt out?

Kristin Burnham covers Consumer Technology, SaaS, Social Networking and Web 2.0 for Follow Kristin on Twitter @kmburnham. Follow everything from on Twitter @CIOonline. Email Kristin at