Google Offers or Groupon: You Make The Call

OK, you didn’t get in on the ground floor of Google and you’re not a millionaire. But you can get in on the ground floor of Google Offers, the search giant’s still-in-beta daily deal service. Not everything Google touches turns to gold, but you might want to be on board if this venture pans out.

Google’s getting into the daily deal business a little late in the game. Groupon, LivingSocial and dozens of other sites have already carved out strong positions in the space. So many deal offers flood email inboxes daily that many participants turn to deal aggregation sites to help manage the flow.

But Google does have brute force on its side. It’s the world’s most-visited website, and its quarterly earnings report last week showed net income of $2.51 billion (a 36 percent gain) on revenue of $6.92 billion. Factor in the luxury of being able to look at how other deal companies are structured and how well their offers have worked and it would seem that Google has a strong chance to be a big player right out of the box. If bottomless resources matter, Google has a chance.

The company is being careful to not bite off more than it can chew. Google Offers beta launched in Portland, OR, last month, and went live in New York and the Bay Area last week. Once these markets are in hand, Google Offers will be heading to Austin, Boston, Denver, Seattle and Washington, DC.

To succeed, Google will need to attract thousands of small businesses such as restaurants—businesses probably already involved with other deal sites. Here’s part of Google’s pitch as to why your restaurant should run its deals through Offer:

* “Google’s reach puts your offer in front of thousands of potential buyers in your area. On the day of the offer, we’ll highlight your offer on our main site, and will also send emails to subscribers.

• “We’ll do the work by finding customers in your area and bringing them to your door so you can focus on what you do best—making them happy.

• “You don’t need to pay anything up front to run an offer. On the day your offer runs, buyers will pre-pay and you’ll get paid a few days later. If no offers are purchased, you don’t pay anything.”

This promise is similar to what competitor deal sites do for merchants. Google Offers hopes to gain a service edge through specialists who will help make a restaurant’s offer look good online. The promise is that the specialist will help you craft an attractive deal—not just its terms, but also the way it looks when it appears online:

“Our designers make your business look great,” the company says. “We help you specify terms that work for your business. Our writers compose a compelling description for you. We do the heavy lifting so you can focus on welcoming your new customers and doing what you do best to make sure they return.”

So is Google Offers a “me-too” or a “can’t-miss?” We’ll find out soon. But in the meantime, the question for operators may be this: “If Google comes to dominate the daily deal space as it does search and I’m not on it, will I have missed a golden opportunity?”

We don’t know the answer. But we would say that daily deals are nothing more than advertising for restaurants, and Google knows more about effective online advertising and makes more money from it than any other company. Keep tuned to find out how Groupon, LivingSocial and the rest deal with their new daily deal rival.