Did Facebook just hint at its answer to Groupon?

January 25, 2011 3:59 PM
Anthony Ha
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Facebook just revealed that it’s testing a new feature called “Buy with Friends” for its site, which will allow users to share their deals on virtual goods — and I’m starting to wonder whether Facebook could bring something similar to non-virtual deals.

Commerce product marketing manager Deb Liu described the feature on-stage today at the Inside Social Apps InFocus conference in San Francisco. (I’m at the conference, but I was busy writing about other news, so for this story I’m relying on the coverage from Forbes and All Things Digital.) The idea is to let users tell their friends about virtual goods purchases that they’ve made in Facebook games. Most interestingly, if a user unlocks a deal, they might be able to share it with their friends.

Facebook has constantly worked to find the right balance in allowing developers to promote themselves in users’ newsfeeds without users feeling that they’re being spammed. (Chief technology officer Bret Taylor said earlier today that Facebook has reduced spam by 95 percent in the past year.) Buy With Friends offers a possible solution to that problem, because a message about a random Facebook game will probably seem much less annoying when it actually benefits you, say if it tells you, “Your friend has unlocked this deal for you — get 40 percent off this special monster food.”

More than 50 percent of users in the test program elected to share their purchases, Liu said.

Again, this is all about virtual goods for now, but it might carry over nicely into the Deals product that Facebook announced last November. Right now, businesses can offer different kinds of deals as a reward for check ins on Facebook Places. What if you could then share those deals with your friends? For example, you might win a discounted pair of jeans if you check in to Levi’s often enough, then you could offer your friends a similar discount. It would be a way for Facebook to compete with popular group-buying site Groupon in a way that doesn’t just copy Groupon’s features.

  • http://twitter.com/ronanob Ronan O'Brien

    As a user i'd find it much handier to buy via a friends purchasing habits than via a system like groupon where you have to go out of your way to check if there deal is relevant to me. This could be huge.

  • http://twitter.com/skypulsemedia Howie at Sky Pulse Media

    Aside from Facebook Ads, nothing this company has done is a winner in terms of engaging users or making money. Brand Pages? Flop. Places? Flop. Deals? Yawn. Facebook Answers and Web Search? Nope. Videos? We each watch less than 4 per month on Facebook! Open Graph? Fail. They forget we are on Facebook to check in with friends and family. That's about it. I would say exchange photos but that has fallen from 7.5 per user per month last April to 5 per month today. I would say to chat. But then why has network usage per user per day dropped from 55mins last April to 38mins a day currently? Why has uniques in the US per month stayed flat since July at 130mil? 3 in 4 US consumers will not be on Facebook today.I see a company overhyped, under delivering, desperately grasping at straws because Zuckerberg is afraid when he goes public in either a pump and dump (this is Goldmans plan) or fizzles he winds up in a box under the SF 49ers stadium because of losing money for powerful people.

  • http://www.realestateactive.com/ Michael Real

    It may be an answer to Groupon if they find it successful for the virtual goods launch. They are doing it in support of their mandatory use of their Facebook credits by game developers. Seems like an added feature to please the game developers and increase their virtual goods sales.

  • http://www.carshrine.com Shane

    There is starting to be a lot of competition in this space with large players like Google and Facebook entering. Wonder if Microsoft will jump in as well

  • http://2facephoto.com/book/?p=18189 ISA 2011: Roundup of Press Coverage

    [...] Facebook Commerce Head Deb Liu Addresses Concerns About Mandatory Facebook Credits VentureBeat: Did Facebook just hint at its answer to Groupon? Forbes: Facebook To Launch Social Group-Buying Feature All Things Digital: Facebook Testing Social [...]

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