Facebook Deals will be all about "social experiences"

When it launches, Facebook Deals will be all about social deals: meaning activities you can take advantage of with your friends.
Written by Emil Protalinski, Contributor

Facebook Deals will be launching "in the coming weeks." A few more details on how the program will work, and how it will be differentiated from daily-deal market leaders Groupon and LivingSocial, have been revealed courtesy of NetworkEffect:

All deals offered on the Facebook platform will be "social experiences," said a spokeswoman–aka "things you can do with your friends." That might include a discount for a karaoke bar or a tour of a haunted house, but not 50 percent off a t-shirt or a pedicure, she said. Facebook's deals will be available for considerably more than a day, she added, without specifying a length. As for how users will pay for the deals, the spokeswoman said Facebook has not yet determined exactly how that will work, but it may include Facebook Credits.

Facebook Credits has so far been mainly used for virtual goods, and occasionally for digital goods. Facebook currently takes a significant cut (30 percent) for the virtual currency, though Groupon and LivingSocial both take roughly 50 percent of the revenue for a given deal.

Even if Facebook doesn't end up using Credits for Deals, we can expect the social network to handle transactions directly through its website. The program will let users see discount offers from partner services, including ReachLocal, Gilt City, Tippr, HomeRun.com, PopSugar City, KGB Deals, Plum District, and Zozi.

Even if Facebook invited Groupon and LivingSocial to participate, both likely would have said no since they prefer to control their customers' full transactions. Both market leaders have a policy of not sharing affiliate fees with distribution partners, while most of their smaller competitors often do share revenue in exchange for distribution.

To read more about the upcoming Facebook Deals, check out these two recent articles:

  • Facebook to launch Groupon-like service "in the coming weeks"
  • Facebook promotes Groupon attack with new Facebook Deals page

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