CBC tech column: Groupon, Google Offers, and targeted social shopping services
This week’s CBC tech column is all about Google Offers and online social shopping services. The column and audio are up at cbc.ca, and archived below for posterity. Download MP3. [audio:http://blip.tv/file/get/Dmisener-20110125_misener_googleoffers486.mp3]
Thirty-nine dollars for a three-hour meditation session. Sixty-five per cent off a Speed Reading Class. Twenty nine dollars for a 45-minute microdermabrasion facelife. Those are just a few of the daily deals that have flowed into my e-mail inbox this week from the likes of Groupon, TeamBuy, and LivingSocial.
When I first signed up for these services, I loved the novelty of a new, time-limited local deal every day. But over time the novelty wore off, and gave way to daily deal fatigue.
Now, online behemoth Google plans to add to that daily deluge of deals.
Late last week, tech website Mashable got its hands on a confidential document that outlines Google’s plans for the new product called Google Offers. I followed up with Google, and it replied with a statement: Yes, it said, they’re “communicating with small businesses to enlist their support and participation in a test of a pre-paid offers/vouchers program.”
This isn’t Google’s first try at getting a piece of the daily deals pie. Last year, Google tried to buy Groupon, and the New York Times reported that the acquisition could have cost as much as $6 billion. But the deal fell through.
How could Google’s service differ from the existing social shopping services?
In a nutshell, through integration with existing Google services.
Advertising is at the core of Google’s business, and it is really good at selling highly targeted ads based on the things you search for, what’s in your e-mail inbox, and where you are in the real world. In my case, Google already has access to my e-mail, contacts, search history, and GPS coordinates. Groupon doesn’t.
When you look at Google’s existing product lineup, it seems primed for an email-based local advertising system. The company already runs Gmail, the Google Checkout payment system, and a slew of location-based services like Maps, Places, and Latitude. A highly-targeted daily deal service fits in quite nicely.
Well, when I first read about Google Offers, I called my friend Thomas Moran. Thomas runs a canvas printing business with his father, and over the past year they’ve worked with with Groupon, TeamBuy, LivingSocial, WagJag … the list goes on.
Thomas told me that Groupon is the 800-pound gorilla of these services, and that from his perspective, it has two things going for it. First, its reach. Groupon has huge numbers of subscribers on their city-based mailing lists. Second, its sales team. Groupon has a very large staff of salespeople who spend most of their days reaching out to local businesses.
As a Groupon competitor, Google definitely has reach. But it’s not clear how it plans to reach out to small businesses. Google’s existing AdWord system is very self-serve, which may not appeal to small business owners who expect some hand-holding.
Targeted advertising, which is Google’s speciality, doesn’t come without privacy concerns. Am I worried that Google uses my web search history and e-mail conversations to deliver ads? Yes, of course. Am I worried that a huge part of my time online is mediated by a single company? Yes. But am I willing to set aside some of those concerns so I can get 50 per cent off a pair of pants? I’m a little ashamed to admit it, but yes.
So that’s the trade-off. Better targeted deals in exchange for a kind of technological surveillance.
Of course, it’s not hard to imagine a world where I use my Google Android phone to look something up on Google Maps, and I’m presented with a Google Offer. So I sign in with my Gmail account, and pay through Google Checkout. And I completely understand why some people would be concerned about that kind of online concentration.
At this point, it’s hard to say how Google Offers will be received. After all, it hasn’t been officially announced yet. But I think it’s important to remember that for all its wild successes, Google also has a history of trying to break into existing markets, and failing.
Last year, Google tried to take on Twitter with Google Buzz. That product was met with much criticism. In 2003, Google went up against Friendster, one of the original social networking sites, with a product called Orkut. Orkut is still around, but outside of Brazil and India, it doesn’t have much market share compared to sites like Facebook.
Right now, we have the 800-pound gorilla of search and online advertising, Google, squaring off against the 800-pound gorilla of email-based social shopping, Groupon. It’s going to be very, very interesting to see if there’s room for both of them.
I’ll be watching, credit card in hand.