By Kelli B. Grant
It seems like everyone and his mother has a daily deals site these days, and now Facebook does, too.
The social networking site launched beta tests today in Atlanta, Austin, Dallas, San Diego and San Francisco. Some of the first offers include a birthday party for four kids at the St. Regis Atlanta for $699 instead of $799 (13% off), and a four-hour fashion tour in San Diego for $37 instead of $75 (49% savings).
So what makes this different than, oh, any of the other 600-plus sites already offering deals? A Facebook spokeswoman says it’s because the offers — “like a really cool Ethiopian place you didn’t know was in your neighborhood, or salsa dancing lessons” — are focused on picking experiences that you might enjoy with friends, rather than the splashy 50% off discounts at local businesses that other sites offer.
If you’re already a daily-deal veteran, it’s easy to be skeptical. After all, there’s nothing to preclude you and three friends from grabbing salsa lessons — at a steeper discount – at deal-focused Groupon.com, or getting your restaurant voucher directly from Facebook partner OpenTable.com, which offers its own daily deals. Sites like LivingSocial.com and Tippr.com arguably do the social aspect one better, offering better prices and freebies the more people you know take advantage of a deal. A Facebook spokeswoman responded by saying the site plans to eventually offer a similar social discount that will make its deals more distinct than those of competitors, but declined to say when that might come into play.
But those of us giving a collective shrug aren’t Facebook’s target audience, says Utpal Dholaki, an associate professor of management at Rice University who studies the space. “Forget about having used them; a lot of consumers still don’t know about daily-deals sites beyond Groupon,” he says. Facebook, with its captive audience of more than 500 million active users, has the opportunity to draw in a wider range of purchasers, especially Baby Boomers who might not have stumbled across deal opportunities elsewhere on the web. (To put that into perspective, Groupon.com got nearly 22.6 million unique visitors in March, according to Compete.com)
Facebook hasn’t revealed how much of the deal purchase price it collects, but smaller discounts suggest smaller margins, Dholakia says. That could attract more interested businesses that didn’t profit from other deal sites’ business models, which can leave them with less than 25% of what you pay for a voucher.
So go ahead, add Facebook deals to the growing list of places to check for a daily deal. But with the social networking site saying that it’s not aiming to be a competitor to Groupon and Living Social, keep in mind that better prices can likely be had elsewhere.