Google Offers: GroupOn Rival or Failure-In-Waiting?

After GroupOn snubs Google's acquisition attempt, the search giant creates Google Offers. Will Google's massive web presence make it a success, or will it be an embarrassing footnote in the coupon rush?

In December of last year, Groupon reminded everybody how much a great idea is worth by turning down a $6 billion dollar buyout offer from Google. The search juggernaut, however, is never one to crawl to a corner and lick its wounds. Just a month later, we learned that Google would be launching a Groupon fighter: enter ‘Google offers’.

So in what situation do you flatly reject $6 billion dollars? Well, Groupon (and its competitors like TeamBuy and LivingSocial) ain’t doin’ too bad at all. Groupon’s initial public offering was valued anywhere from $15 billion to $25 billion dollars. The company was arguably the darling of Forbes.com last year and was identified, quite simply, as the fastest growing company ever. They were also projected to be the fastest company in history to reach a billion dollars in sales. With those kind of numbers, a $6 billion offer seems a bit like offering a guy a grand for his Maserati. Google may have been hoping to acquire the two year old company for a song, but 29 years old or not, Groupon CEO Andrew Mason wasn’t that easy to woo.

Thing is, Google clearly didn’t decide one Monday morning to buy the first tantalizing company they could think of. Something (read: everything) about Groupon fit perfectly into Google’s many-faceted model. It may have been met with more than a few scoffs, but no one should have really been surprised when Google Offers surfaced.

So why was it initially met with snickers? Understandably, it seemed like the same old story. Behemoth tries to swallow small upstart, fails, creates a carbon copy that fails miserably, spends next year or so trying to make everyone forget it ever happened. Google itself has seen limited success (at least in major markets) with attempts like Orkut and Google Buzz. However, there are a number of factors in this particular venture that make it a far more intriguing one that it may first seem.

Firstly, don’t go looking for a GoogleOffers.com where you’ll be met with a slew of coupons offering you half price pedicures and $6 steak dinners. At least for now, the Google Offers business model is at most a distant cousin of Groupon’s. The Google Offers page is instead a short message to business owners offering them the opportunity to “attract new customers and bring back old ones by enabling you to instantly post discounts and other types of special offers across Google properties.” Italicization mine – because the significance of that can’t be stressed enough.

For businesses to take advantage of Google Offers, they must be signed up with Google Places. You’ve seen it in action before; itself a sub-API of Google Maps. You search businesses in a certain geographical location, and the red inverted teardrops indicating their locations pop up on the map. Mouse over, and you’re presented with a review; click and business address, phone number et. al appear. What you may not have come across just yet is the Google Offers integration that already exists, but there’s a nod to it on their Places example page, with a link to ‘Coupons’ appearing in the example box shown. So when a tourist searches ‘Chinese Food’ in Google Maps for downtown Toronto, and in the mass of unfamiliar choices one offers a 50% off coupon, I wonder which that tourist is most likely to choose?

And that’s not it. Google AdWords will target potential customers in your region, while Google Product Search will send out a come-hither to those actually searching for your specific product or service. Want to make your purchase online? Why, Google Checkout will let you do all your shopping from one secure account, of course.