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Google expands Offers internationally with DailyDeal buy

September 21, 2011

Google looks to gain international foothold for Offers

 Google is further cementing its mobile commerce strategy through the acquisition of German daily deals site DailyDeal. 

The company is continuing to build out its daily deals offering via recent acquisitions of DealMap and now DailyDeal as well as with moves to promote deals on its homepage in certain markets, among other strategies. The move speaks to the universal appeal of daily deals even as players such as Facebook and Yelp retract from the space. 

“As more and more people go online to find the latest, most relevant deals, we’re exploring new ways to help consumers get the best local deals out there,” said Katelin Todhunter-Gerberg, a spokeswoman at Google, Mountain View, CA. 

“The DailyDeal team has an incredible track record in this space, and we look forward to working with them,” she said. 

Local relationships
The model of buying established daily deals businesses in other markets is one that Groupon has also used. 

“Groupon used the CityDeal deal to expand its international presence and act as a hub for management,” said Peter Krasilovsky, vice president at local media research firm BIA/Kelsey, Chantilly, VA. “It has been a very successful strategy and I believe that this is what Google’s intentions are as well. 

“They can’t just be a search engine – you have to go out there and have a relationship with local businesses,” he said. 

The daily deals leader acquired German CityDeal in 2010 to use as a foundation for offering deals throughout Europe. 

“The market opportunity for driving revenue for local merchants through local offers is global,” said Blair Swedeen, senior vice president of strategy and business development for Placecast, San Francisco. 

“This deal is significant within mobile as Google continues to move the market towards location-based offers delivered to mobile devices with the ability to pay for those offers using a mobile wallet,” he said. 

“At Placecast, we see local offers, mobile advertising and mobile payments necessarily coming together to deliver real value for local merchants and consumers – this acquisition is clear confirmation of that trend.” 

On the mobile side, the deal gives Google a way to leverage instant deals and a mobile-savvy consumer market.  

“We would expect them to come out with a similar instant deals offering that allows people to buy discounted meals and other local deals based on their GPS area,” BIA/Kelsey’s Mr. Krasilovsky said. “This is the new part of the deal space that leverages user lists that have been brought in from the daily deals. 

“In Europe, we can expect a faster rollout of mobile services because the population is more conditioned to online mobile services,” he said. 

By acquiring a local player, Google gains immediate presence with both local consumers and local merchants in the German market. 

The significance of the deal also lies in the fact that DailyDeal has an established sales force in place. 

“Unlike the DealMap acquisition which gave Google aggregated offers with no direct sales force or consumer relationships, this deal gives Google an email list of opted in German consumers and a local sales force with existing merchant relationships,” Placecast’s Mr. Swedeen said. 

The deal could be a sign that Google is looking to buy established daily deals businesses in other markets.  

“As Google Offers looks to scale the business, we expect Google to continue to buy in to large markets where the leader is an independent player,” Mr. Swedeen said.

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York

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