NEWS FLASH: Facebook Is Getting Rid Of Deals

Facebook is phasing out the deals intended to compete directly with Groupon, meaning offers that don't require a check-in or location tag.

Facebook is phasing out the deals intended to compete directly with Groupon, meaning offers that don’t require a check-in or location tag.

A company spokesperson told us via email:

After testing deals for four months, we’ve decided to end our deals product in the coming weeks. We think there is a lot of power in a social approach to driving people into local businesses. We remain committed to building products to help local businesses connect with people, like ads, pages, sponsored stories, and check-in deals. We’ve learned a lot from our test and we’ll continue to evaluate how to best serve local businesses.

A small business survey in February had found that half of the companies that had used a deal type of service don’t plan to use it again. That data, from Merchant Circle, suggests that the market for group discounts could eventually dry out. Facebook must have seen some of this and factored it into the decision to end the product.

Also, the forthcoming changes to the news feed and privacy settings would have altered the visibility of deals, potentially reducing their exposure as users choose to limit who can see various activities. These changes also include the phasing out of places in favor of location tagging.

So it’s possible that Facebook’s termination of deals is really part of a recasting of the product into something more compatible with location tagging.