News of a new coupon service from Facebook, called Facebook Deals, emerged last night and was unveiled early this morning. We looked at all that Facebook had to offer and said it could blow Groupon and Living Social out of the water.
Now that the product has been unveiled and Facebook PR has sent us multiple emails letting us know that things I presumed would be features of the service will not in fact be present at launch – that changes things just a little bit. I still think that the fundamental value proposition of Facebook is clearly the strongest in the field: structured and verified user data, the friend network and the newsfeed. But there are a few details to clear up about the product and it looks like it’s going to be less ambitious at launch than I suspected last night. It still looks awesome, though.
It’s Not Free
Last night I reported that Facebook Deals could be free to merchants. It turns out that it’s only Facebook Check-in Deals that are free and those have been for a few months. Got that? Deals are not free, Check-in Deals are free. Deals other than Check-in Deals are not free.
That would have been a very bold move on Facebook’s part and would have helped it undercut the whole market. The company could then have made initial profits from its cut of purchases made using Facebook Credits.
But…
Facebook Credits Will Not Be for Physical Goods at Launch
The ability to make Deals purchases with the same Facebook Credits that users have paid to charge up to play games with seems like an incredible opportunity, though legally complicated. Perhaps that’s why Facebook PR wrote us back after the news of the feature launching leaked to clarify that Credits will not in fact be usable to purchase physical goods at launch. Rather, Credits can be used to purchase vouchers for things like events.
It’s Not Mobile
This part is a little amazing to me, but maybe the tangle of products and managers at Facebook warranted such a strategy: Facebook Deals will not be available through the mobile app at launch. That seems like a huge lost opportunity, but perhaps the Deals team didn’t want to step on the toes of the Check-in Deals team.
Facebook Deals Could Still Be Huge
All of the above might change in time but even at launch this is a very, very strong product. That vendors will recieve demographic and taste data about the people who redeem deals sounds incredibly valuable. That Deals will be social and will spread through the newsfeed does too.
Some people have laughed that Facebook Deals is likely to “flop” like Facebook Places, Questions and Groups. Have those really flopped like a Google social software launch, though? Facebook says 50 million Groups have been created and that the feature is among the fastest-growing on the site. (Could that really be true, compared to Photos, Videos, Events, etc.? Maybe those are core features and don’t count.)
Facebook Questions does seem to be less than thrilling in its traction. That’s a real shame – it had huge, huge potential but seemed poorly built.
Places? Facebook says it’s already much, much bigger than competitors Foursquare and Gowalla say they are and at least one reputable survey of local businesses says that merchants are far more engaged with Facebook Places than other services. The Places feature is much simpler than it could be but perhaps (someday) integration with Deals will help with that.
Unlike questions asked by random people, empty Places pages or strategically ambiguous Groups – Deals offers very clear value, created by professional marketers and vetted in part by your friends’ Likes and redemptions.
Lots and lots of potential. A very interesting platform. Big caveats. Now it’s time to see how well the company can execute and how long it keeps itself slowed down by the above restrictions present at launch.
