Google has officially waded into the already crowded and murky waters of Daily Deal sites. (I won’t go into how badly Google needs to start creating innovation, instead of copying others). If you want to know what a daily deal site is, just look at successful internet start ups like Groupon and LivingSocial.com.
Google was turned down when it attempted to buy Groupon last year (for reported prices of $6 billion dollars) and immediately went to work on creating its own Groupon website killer. Will it work? Can Google upend the large, fast growing, startup?
The fact is, Google is THE company to beat online, or to keep ahead of at the very least. Google is notorious for trying to ensure that it has a piece of everybody’s pie, whether or not it can do it effectively. They love to buy small companies to allow them to gain access to new technology, new industries, and new markets. Google has a ton of money to throw at something like this, and already has a mammoth advertising network and user network. By incorporating Google Offers into Google search results, they will effectively be able to cut out sites like Groupon and Living Social that rely on referrals and direct links to succeed.
And since Google already has one of the largest advertising networks of businesses and ecommerce sites around the globe, they undoubtedly will be able to reach far more consumers with far more products quickly.
What will stand in the way of Google’s dominance?
Google will need to be able to keep its prices affordable for the businesses and for the consumer. I’ve seen a sneak peak at one of Google’s offer contracts and they initially requested a 50% share of revenue, and had initially suggested a 50% discount off of regular prices. (For those of you doing the math, they were asking for a 75% reduction on price). And there were lots of stipulations about product deliverables and who was responsible for what if a consumer wasn’t happy. Let’s just say that Google Offers did not look very approachable for most businesses.
Google will need to avoid appearing to ‘push the product’. Google already is treading in dangerous waters as it tries to force more and more users into its social networking products. This type of ‘push’ often discourages consumers as it distracts them from the actual results they wanted, and it often discourages advertisers as they see themselves competing with the company that is supposed to be advertising for them. All in, if Google can’t integrate this in such a fashion that seems natural, then it could end up damaging their already tarnished reputation as the best place to turn for real, high quality search results.
Google also needs to avoid currying favor of one product over another. It will be interesting to see what effect if any, Google Offers will have on their ranking algorithms. Will Google start promoting its other products by promoting the businesses who sign on for Google Offers? IT seems like a natural thing to do for a business that is self interested, but as an end consumer and as someone working in search engine optimization and online marketing, I think this would ultimately dilute and damage its ability to provide meaningful search results. I can tell you already, that by watching very carefully the search industry, that Google is fast losing its quality- its results and algorithm updates seem to be more and more lackluster and more and more change for the sake of change.
In the end, I like this potential product. I’m sure Google’s size and reach will enable it to create a far more competitive marketplace for consumers to purchase. But, I am just as concerned that this might be another step where Google stops thinking about its search users and starts thinking more about its bottom line. Time will tell.