Facebook Deals Launches in Five Markets

Facebook today launched its Deals product as an “alpha” in five markets: San Francisco, San Diego, Dallas, Austin and Atlanta. The effort plays up Facebook’s social connectivity, making it simple to “like” and share deals, and promote throughout the site. The launch comes at a time of rapid expansion in the deals space. Google Offers has also just quietly launched a test product in Portland, Oregon; New York City; San Francisco; and Oakland, California.

The launch of a socially driven deals site stands in contrast to some of the newer deal sites, which play down the social elements of deals, as massive email lists and deal exchanges dwarf the role that viral leads have played. But nobody else quite has the clout of Facebook for social.

Deals has been given its own section on the left-hand menu bar, above Groups and Marketplaces, its socially driven classifieds product with Oodle. They’re also tied to Events on the right hand menu (if it is an event). Time and location of the event are put on top. Users can also see which friends have purchased the event. “Deals Near You” is another section.

The deals have clearly been designed to make it easy for businesses to add their own deals, rather than rely on the small inventory of email driven deal sites (i.e., Groupon and LivingSocial). It also encourages deals of different sizes, enabling low priced deals such as coffee discounts for instance.

The whole thing is getting a high-profile launch. When I logged on to Facebook this morning, for instance, deals were promoted as a popup before I had access to the rest of Facebook (I live in San Diego, one of the alpha markets). The pop up let me personalize deals for town and ZIP code. Users can buy deals with their credit card or with “Facebook credits” from check-ins, etc.

In addition to possibly collecting commissions on deals, Facebook appears likely to reap some straight-ahead advertising revenues. In a PDF that businesses can download, Facebook indicates that businesses are “eligible” to advertise sponsored units.

In sum, we’d note that Facebook definitely has some major advantages in this space. Just witness how EventBrite has leveraged Facebook mentions for its event sales. It figures every Facebook mention is worth about $2.50. BIA/Kelsey research shows that 48 percent of SMBs now report some type of interaction with Facebook.

What Facebook doesn’t seem to have are feet on the street and telemarketers. The thousands of salespeople that leaders like Groupon and LivingSocial have on board definitely help move local small businesses out of their inertia. Facebook will go fairly far with self serve. But how far?