Facebook Deals Is No More: Good Timing for Groupon

It hardly seems any time ago that we were first bringing you news about Facebook Deals, a marketing tool developed by Facebook to attract customers and also repay them. However today’s news is that Facebook Deals is no more, as Facebook has decided to shut it down after only four months of testing.

A statement issued by Facebook said, “After testing Deals for four months, we’ve decided to end our Deals product in the coming weeks,” according to Alistair Barr of Reuters. When Deals was first launched back in April it looked set to rival Groupon but the daily deals have not worked out and that must surely be music to the ears of rivals Groupon and Living Social.

When Deals began, offers were first available in five cities of the U.S. with a sales team liaising with local retailers and suppliers. Other daily deal companies were also taken on board to run offers but in a surprise move Facebook is stepping back from the daily deals market adding in its statement, “We think there is a lot of power in a social approach to driving people into local businesses. We’ve learned a lot from our test and we’ll continue to evaluate how to best serve local businesses.”

Some industry insiders were less taken aback by the news. Vinicius Vacanti, co-founder of Yipit.com, which tracks and aggregates the daily deals market, said, “It is surprising that Facebook ended their deals product after just four months. On the other hand, Facebook Deals had been an underwhelming product and experience.” Vacanti went on to say that this did not mean that the daily deals market was no longer viable but suggested that large social media and tech companies could not expect to simply step into the market without more prior planning.

Facebook also stated that it still intends to go forward with projects such as Ads, Pages, Sponsored Stories and Check-In Deals, and was committed to working with local businesses. With Groupon heading for a $750 million IPO, the departure of Facebook Deals couldn’t have come at a better time for the company.

Are you surprised at the demise of Facebook Deals so soon into the testing? Did you think there was further potential in the platform? Let us know with your comments.