It's Time to Take Google Offers Seriously

Google (Nasdaq: GOOG  ) is ready to take the next big step in hopping on Groupon's coattails.

The dot-com heavyweight is announcing this morning that it's rolling out Google Offers in New York City and San Francisco. It began testing its daily deal prepaid vouchers in Portland, Ore., last month.

Rolling into two of the country's most prominent cities today is a clear indication that Big G believes that its flash-sale site is ready for its primetime close-up. Austin, Boston, Denver, Seattle, and Washington, D.C., are coming up next.

This is obviously becoming a crowded niche in a hurry. Something as simple as selling marked-down experiences will be enough to take Groupon and LivingSocial public later this year at what will likely be 11-figure valuations.

The buzz has grabbed the attention of the online juggernauts. AOL (NYSE: AOL  ) booted the World of Warcraft community congregating at its Wow.com domain to relaunch it as a daily deals site last year. Amazon.com (Nasdaq: AMZN  ) has invested heavily in LivingSocial. Local leads specialist Local.com (Nasdaq: LOCM  ) is acquiring the company behind Screamin' Daily Deals.   

Niche leaders are getting in on the act, too. Whether we're talking about Travelzoo (Nasdaq: TZOO  ) putting up local travel specials, OpenTable (Nasdaq: OPEN  ) offering up discounted dining vouchers, or The Knot parent XO Group (NYSE: XOXO  ) presenting wedding-day deals, everyone that hasn't already jumped into the pool is busy trying on different swimsuits.

Google's name isn't enough to make Google Offers a force to reckon with, though. All of the online giants have their share of flops. Look up Nexus One, Lively, and Google Answers for just some of the search leader's blunders.

However, there are two reasons Big G deserves to be taken seriously here.

The first thing working in its favor is that Google is the leader in paid search. Google is where local advertisers have to go if they want to capitalize on area leads. In other words, Google already has access to many of the merchants that frequent these promotional opportunities.

The second reason to give Google Offers some serious credibility out of the gate is that Google also has a stronghold on the consumer through its website and through Android.

Yes, Android.

Starting today, the company's Google Shopper 2.0 app for Android will feature a "Today's Offer" tab to highlight the city-specific deals. Android is the country's leading smartphone platform, so don't dismiss the potential of Google Offers to reach out to mobile audiences on the go.

It took a while for Google to hop on Groupon's coattails, but now it wants to try on the coat itself.     

Will you be a buyer of Groupon and LivingSocial after they go public? Share your thoughts in the comments box below.

The Motley Fool owns shares of Google. Motley Fool newsletter services have recommended buying shares of OpenTable, Amazon.com, and Google. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Longtime Fool contributor Rick Munarriz routinely checks the deal sites. He owns no shares in any of the stocks in this story and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 12, 2011, at 9:30 PM, jobutch wrote:

    TZOO is the best quality company in this group by far. Do the research. TZOO is profitable, has a loyal userbase, hotels prefer their clients more because they spend more and return to use the hotel again, they have the highest percentage of vouchers sold by far than any other company.....the list goes on. This is a no brainer for a savy investor.They blew away earnings last quarter, and should do even better this quarter and the next several quarters. They just expanded to the iphone by way of a new app, and will be anouncing an app for android soon too. Their app uses technology within the iphone that tells them where you are so that TZOO can instantly send you info on deals where you are currently located. Frightening but true. This is a company that I want to own for the long term. Should be well over 100 dollars after the earnings release on 7/18. I bought at 52 dollars recently and have no intention of selling until at least 120.

  • Report this Comment On July 13, 2011, at 8:34 AM, TMFConan wrote:

    I just downloaded the shopper app. It uses your location to find food and entertainment offers near you -- impressive. I agree with Rick that this a serious threat to all groupon-esque (yes, I said it) ventures.

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