Google Enters the Coupon Business
Will Groupon, FourSquare, Yelp and maybe even Facebook Deals/Places (and dozens of other coupon sites) be in trouble now that the Big G has aggressively entered the local coupon space with Google Wallet?
As far as we’re concerned, the short answer is ‘yes’.
Up until now, Google has been largely on the sidelines as many companies – GroupOn in particular – have been making money hand over fist with local offers.
For those who don’t know how GroupOn makes money, here’s a basic synopsis:
- Retailers post offers on the coupon platform’s site
- Subscribers are notified about the offers in their area
- GroupOn splits revenue with retailers on a 50/50 basis, with some bigger retailers getting a slightly larger stake if they do bigger volume
Essentially, they are making $0.50 off of everyone else’s $1.00 in revenue generated from GroupOn coupons.
It’s a brilliant business premise that requires critical mass and viral / social sharing, and it looked like they were going to own this market.
Google Wallet has only been tested in San Fran and NYC, but expect them to roll the product out to the rest of the US during 2011 and in Canada … say in 2015 (things are always a little slower to happen here).
Once the platform becomes more ubiquitous, expect the following to start to disappear from your wallet:
- Loyalty cards
- Paper frequent purchase cards
- Credit cards
- Gift cards
- Event tickets
And here I was starting to worry about when Google was going to start to make some serious coin …
Bottree Digital Services