Local business advertising market in spotlight with Google’s entry

Google is preparing to unveil Google Offers, in a direct competition with Groupon, as if suggesting: ‘If you are not able to buy them, confront them.’ Acquiring it would have smoothly turned over to Google most of the already existing business relationships struck by Groupon with local merchants not only in the US but several other countries as well.

The acquisition could have propelled Google into the highly paying coupon distribution domain where it could leverage its powerful advertising technology. If successful, the bid would have been one of the priciest acquisitions for Google. The Washington Post mentions in a news report that the company’s aspiration to enter the coupon business is very well-known. However, Groupon refused to accept a mouth-watering $6 billion complete buyout offer.

The report adds: “Larry Page is taking over as Google’s chief executive. He co-founded the firm a decade ago after dropping out of graduate school, to build one of the most dominant entities in the business world. It followed up this change with a new product. Google has confirmed that the new feature is real.”

New pre-paid offers/ vouchers plan for small businesses

Founded in 2008, Groupon’s estimated revenue in 2010 was pegged at $500 million. The Chicago-based company has over 4,000 employees at the last count, and growing. It works in sync with local merchants to provide lucrative deep discounts products. However, the good deals don’t really kick in till a threshold number of members actively commit to them.

Google is now targeting small businesses on its own to draw their support and ensure participation in a test of its new pre-paid offers/ vouchers plan. This project is part of the company’s effort to come up with innovative products like the Offer Ads beta. It aims at connecting businesses with key customers in more effective ways.

Advantages Google has in the local business advertising market

  1. It is quite likely that Google will make its way into the local deals market with a real bang thanks to its vast reach, massive advertising network as well as immense brand recognition.
  2. Google already enjoys a solid advertising network because of AdWords and AdSense, albeit not focused on local market. It will still be a good starting point for the new launch.
  3. By integrating its advertising network with daily deals, Google can easily and quickly gain good exposure that businesses cannot afford to ignore. They would be tempted to sign up simply through word of mouth.
  4. Google’s brand recognition legitimizes the service automatically, backed further by promotions in local searches and Google Maps to attract users.
  5. Drawing users to Offers wouldn’t prove to be a major hassle for Google. A mere link on its homepage would set the ball rolling.

So, make no mistake! The search engine giant will be a serious contender in this thriving market. And what does the move mean for Groupon, currently an undisputed king of the lucrative space? Will it find a way out to challenge and tackle the might of Google for whom the dynamic daily deals market is all about cultivating a very strong local advertiser network? It remains to be seen. We shall keep you informed about the developments…