The online coupon market is a billion dollar industry led by popular social media companies like Groupon and LivingSocial. Last year, internet giant Google made a play at Chicago-based Groupon with an unprecedented, yet unsuccessful bid of $5.3 billion. At the time, the company’s market share was at $25 billion, somewhat of a no-brainer Groupon, it would seem.
I believe the popular saying is: “If you can’t beat them, join them.” Well in Google’s case, it’s exactly the opposite.
Google has begun test driving Google Offers, its new online coupon service, in Portland, Oregon. The service will mirror those provided by Groupon and LivingSocial, offering discounts from local businesses to online consumers. However, Google plans to incorporate its e-wallet service “Google Wallet” into its Offers – another intensely competitive market. The plan, once both systems go live, is for users to be able to swipe their Android smartphones, which must be NFC (near-field communications) enabled, against customized readers to redeem the promotions.
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Google Offers will be the first platform to integrate both online coupon and online payment services into one. If this venture is successful, it should mean big bucks for Google. The online coupon market is already wildly popular and established. As users become more comfortable with mobile payments, which are steadily moving forward, Google Offers could be in perfect position to take over.
The introduction of Google Offers is one of many new developments coming out of camp Google. Nearly every move they make comes ripe with roadblocks, including lawsuits. This venture is no different. One week after Google launched its Wallets system it was hit with a lawsuit from PayPal. These online markets are fierce with competition – no surprise given the billions of dollars at stake.
The refusal to accept Google’s bid by Groupon seemed like the right move at the time, I’m sure. Now it appears that its biggest competitor up to this point, LivingSocial, is expected to pass it in 2012. With the introduction of Google Offers, it will be interesting to see how Groupon’s 50 million users respond. Either way, it doesn’t appear that Google cares… If you can’t join them, beat them.
