Google Goes After Groupon

It wasn't long ago that Google was trying to buy daily-deals Web site Groupon. But Groupon spurned Big G's advances and now Google says it is about to start testing Google Offers, a local coupon service that will function much like Groupon.

Google Offers is being called “a new product to help potential customers and clientele find great deals in their area through a daily email.”

Nate Tyler, a Google spokesman, said the company is "communicating with small businesses to enlist their support and participation in a test of a prepaid offers/vouchers program."

Reports from around the blogosphere say that Google's pitch to local businesses will include a "compelling write-up for your offer" as well as advertising across Google's ad networks and emails to subscribers to the Google Offers service.

On the surface, the plan sounds similar to both Groupon and LivingSocial, currently the leading local-discount sites. Both send users a daily email with a local deal of the day. They then have the opportunity to buy that deal within a specific time.

Once enough people have made the purchase, the deal is triggered and subscribers get their discounted meal, oil change,  pair of gloves or whatever.

Dull but lucrative

It's not exactly the most mind-bending use of technology but it's further evidence that doing a really huge number of little deals is as good – if not better – than doing a big deal every now and then.

Since Chicago-based Groupon is privately held it doesn't reveal its finances but many knowledgeable observers peg it as the fastest-growing company in the known universe at the moment. It operates in 35 countries and has more than 50 million subscribers.

Google reportedly offered nearly $6 billion for Groupon, which raised nearly $1 billion in private investments after turning its back on the Google offer.

Despite its rapid growth, Groupon has remained relatively free of controversy and drama, although a Minnesota law firm says it is investigating whether Groupon may be violating certain laws that make it illegal for a company to sell gift cards that expire after a certain period of time.

"The goal of the investigation is to determine whether Groupon customers may be entitled to reimbursement for expired gift cards," said a spokesman for Halunen & Associates in Mountain Iron, MN.