One big contender in the immensely crowded “daily deals” space has bowed out, and it’s not one of the tiny upstarts, either.
In a move that could portend the beginning of the end for the spate of Groupon clones on the market, Facebook has announced that it is shuttering the Facebook Deals initiative just four months after stepping into the market to take on Groupon and other hyperlocal deals sites. It could say a lot about the long-term profitability of such ventures that the deep-pocketed Facebook has scrapped its pawn in the game.
Facebook spokeswoman Annie Ta commented briefly- though not very thoroughly- on the decision to curb the initiative, but offered no reason behind the move:
“After testing Deals for four months, we’ve decided to end our Deals product in the coming weeks… We’ve learned a lot from our test and we’ll continue to evaluate how to best serve local businesses.”
As Ta hints, it will be interesting to see if Facebook continues to reach out within the hyperlocal market after Facebook Deals is closed, or if the concept as a whole is off the table at the social network. Nathan Richardson, president of Gilt City, commented to Bloomberg on his company’s experience reaching out to customers using Facebook deals:
“Gilt City is focused on exclusive experiences and insider access in the great cities in the U.S., and Facebook Deals performed well for us… We still believe in the Facebook platform.”
Facebook reps noted that the company will continue to promote Ads, Sponsored Stories and Pages and offer some deals for Facebook Places check-ins.
