Google has upped the ante with its daily deals program, taking the unusual stance of linking to a deal on its homepage which for years has usually been reserved for just the company’s logo and search bar.
The surprising move also comes just days after social networking giant Facebook said it would be scrapping its group buying program after a short trial.
Google rarely uses its home page for advertising. The move has prompted speculation over whether Groupon is preparing to escalate its competition with Groupon, which it reportedly courted last year in a deal that could have been worth several billion dollars.
Telsyte senior research manager Sam Yip says the deal is evidence of “very interesting times” right now in the daily deals and group buying space.
“We’ve just seen Facebook pull out of the game. I suspect it’s a stunt, and not something that will happen on an ongoing basis.”
A Google spokesperson has said in a statement that users would benefit from the deal being placed on the main page, which is visited by millions of users every day.
“We occasionally include a link on the Google homepage that points users to important information, whether it be about a relevant cause, a new product or an offer,” the spokesperson told Reuters.
The deal itself was for discounted tickets for the New York Museum of National History.
While Google has traditionally refrained from using the homepage for advertising services, although it has done so in the past from time to time, the advertisement highlights Google’s power to shine the spotlight on particular deals.
However, Yip says while this may help Google in some ways to go up against Groupon, the search giant will also need to ensure it can maintain good relationships with merchants.
“As to whether or not they are well positioned, it comes down to what relationships they have with the merchants. They probably have a good relationship with merchants who use AdWords and so on, but those smaller merchants may be different.”
“Those stores such as Mum and Dad stores, and the cafes down the road, many don’t even have a website. So that’s going to be a challenge for Google.”
Yip says this is part of why Facebook may have left the group buying market.
“When we look at Facebook, it’s the same issue. How do these big companies address and work with smaller merchants, where the majority of the market is located?”
“There are always questions about how nimble you can be, and how you can adapt and change deals, especially if you’re a big company.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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